Can Rescheduling Explain the New Jersey Minimum Wage Studies?

In a recent and storied paper, David Card and Alan Krueger (1994) claim to find evidence that the 1992 New Jersey minimum wage hike raised the level of employment in fast food restaurants in that state (although not significantly by conventional statistical standards). In a response widely-cited in the press, David Neumark and William Wascher (1995), using data on payroll hours, claim to show that there was a decline in employment in the New Jersey restaurants. While both teams loosely characterize the labor input in terms of "full-time equivalent employees", the Card-Krueger data set includes the number of workers and the Neumark-Wascher data set (with the exception of a subsample described in more detail below) includes the total number of hours. A major issue in this on-going debate, which now includes added papers by Neumark and Wascher (1996, 1998) and Card and Krueger (1998), has been the quality of the respective data sources.