Week 4 – Assignment: Assess Distributive Policy Administration at the Agency Level Instructions P

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Week 4

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Estimating Policy Outcomes

Policymakers anticipate certain outcomes of the policies they implement. Since policies

are designed to address particular issues and pertain to specific industries, individuals,

and practices, policymakers estimate who will benefit from the policies they create and

what impacts the policies will have on various aspects of the general public. Public

policies are instituted to manage and govern different components of our society. Makers

of public policies should know what the outcome of their work will be—especially for

policies that have punitive ramifications.

While it is good to understand the potential policy outcomes, policymakers cannot always

anticipate all outcomes because of unpredictable circumstances such as people’s behavior,

changes in the economy, or emerging threats that might not have existed at the time the

policy was drafted. There are times when the public’s reaction to a new policy goes in a

different reaction than policymakers anticipated (e.g., the stop-question-and-

frisk program, which originated in New York City’s police department).

For cases where policymakers correctly anticipated the policy outcomes, there are usually

more benefits being received from these policy outcomes because policymakers have

examined most of the areas that needed coverage by the policy and the public is usually

happy with these types of distributive policies such as housing choice vouchers that

subside homes for people who cannot afford stable housing on their own. In this case,

policymakers did a good job outlining eligibility criteria for entry into the program and

have thought of different scenarios where members of the public might qualify or not

qualify for services. Oftentimes, however, these same policies are revised based on new

developments that were not anticipated in the original implementation.

References:

Be sure to review this week’s resources carefully. You are expected to apply the

information from these resources when you prepare your assignments.

83.33 % 5 of 6 topics complete

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Books and Resources for this Week

U.S. Department of Labor, Bureau of

Labor Statistics
Link

Goodman, J. M., Boone-Heinonen, J.,

Richardson, D. M., Andrea, S. B., &

Messer, L. C. (2018). Analyzing policies

through a DOHAD lens: What can…
Link

Krueger, A. B. (2014). The department

of labor at the intersection of research

and policy. ILR Review, 67(s3), 584–

593.
Link

U.S. Department of Labor, Bureau of

Labor Statistics
Link

Wolf, M. G., & Lockard, C. B. (2018).

Occupational separations: A new

method for projecting workforce needs.

Monthly Labor Review, 1–25.
Link

Week 4 – Assignment: Assess Distributive Policy

Administration at the Agency Level
Assignment

Due April 3 at 11:59 PM

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Public agencies play pivotal roles in building the public’s confidence in public institutions.

Public agency officials understand how to interact with members of the public and know

how to reassure the community when there are public outcries for justice, equality, and

better-quality services. As an agency manager at the U.S. Department of Labor (DOL),

Bureau of Labor Statistics (BLS), create a video message for release to state officials

where you inform the public of current labor statistics. On the BLS website, run a report

for one U.S. state of your choice and provide a short video based on your findings. Ensure

your video captures the following:

1. Describe the statistics for reported workplace injuries and illnesses over the past

three years within the state of choice.

2. Explain the types of injuries that occurred and the industries with the highest

percentage of injuries.

3. Assess the types of policy solutions state agencies have implemented to assist with

benefits for employees.

4. Critique the employers’ policy response and solution and the impacts on the

workforce.

Length: 2-3 Minutes

References:

Your video presentation should demonstrate thoughtful consideration of the ideas and

concepts presented in the course and provide new thoughts and insights relating directly

to this topic. Your response should reflect scholarly writing and current APA standards. Be

sure to adhere to Northcentral University’s Academic Integrity Policy.

Upload your document and click the Submit to Dropbox button.

ILRReview, 67(Supplement) 2014. © by Cornell University.
Print 0019- 7939/Online 2162- 271X/00/6703 $05.00

THE DEPARTMENT OF LABOR AT THE

INTERSECTION OF RESEARCH AND POLICY

ALAN B. KRUEGER*

I want to begin by thanking Secretary Solis for her service as secretary of labor during a time when American workers are recovering from the
worst recession since the Great Depression. Secretary Solis’s commitment to
unemployment insurance, job training, green jobs, and enforcement of reg-
ulations has helped the economy to recover, and will provide for a stronger
foundation for economic growth going forward.

My first experience in government was when I served as the chief econo-
mist for the Department of Labor (DOL) when Bob Reich was secretary of
labor in 1994–95. I recall the close working relationship that Bob had with
Laura Tyson, then Council of Economic Advisers (CEA) chair, and I am
pleased that we have been able to continue that tradition. Moreover, my
time working at the labor department made it much easier for me to be able
to make a transition to serve as chief economist of the Department of the
Treasury in the midst of the financial crisis in February 2009, as well as in my
current job. As a professor before joining DOL, I had never heard about
Exec Sec (then headed by Michael Kerr) or the other essential administra-
tive processes that enable a major government department to function.

I want to use my time today to discuss the role that the Labor Department
has played in developing and using research to inform public policy. My
experience at DOL was part of a long line in this tradition.

Channeling Research into Policy

Since its creation, the labor department has played a critical role, often at
the forefront of the government, in using research to inform policy mak-
ing, and, equally important, in developing policy- related research. It has
often been a leader in the government in investing in research—and, just as

*Alan B. Krueger is Bendheim Professor of Economics and Public Affairs, Princeton University. He
was chairman of the President’s Council of Economic Advisers when these remarks were presented, and
he served as Chief Economist of the Department of Labor in 1994–95.

DOL AT THE INTERSECTION OF RESEARCH AND POLICY 585

important, in developing the institutional and human infrastructure to con-
duct research—as well as in creating an institutional structure to incorpo-
rate research into public policy making. This history has served the
government and the research community well.

As an economist, I think that DOL has helped to overcome two important
market failures when it comes to the production of actionable, policy- related
research. First, government agencies and the public benefit from policy-
related research on topics such as the benefits and costs of job training or
the most effective strategies for enforcing workplace safety regulation, but
researchers have little private incentive to conduct such research, especially
in fields that highly prize theoretical work over applied policy research. Sec-
ond, academic researchers do not always understand the research needs or
priorities of policy offices. Over the years, DOL has overcome these market
failures by setting up internal and external institutions and by building re-
search capacity.

Developing Institutional Capacity

Three offices within DOL have been central in the department’s efforts to
develop policy- related research and in the department’s ability to incorpo-
rate research findings in policymaking and program implementation: The
Office of the Assistant Secretary for Policy Evaluation and Research (ASPER,
now ASP), the Chief Economist’s (CHECO) Office, and the Chief Eval-
uation Office (CEO). The Bureau of Labor Statistics (BLS), of course, has
long played a critical role in providing unimpeachable data for policymak-
ing across the government, but I will focus on the roles of ASPER, CHECO
and CEO, which have received less attention.

ASPER was founded in 1972, when James Hodgson was secretary of labor.
His goal was for ASPER “to focus on general economic policy, jobs and train-
ing programs, income maintenance efforts, health and disability issues, and
labor- management concerns.” These are still central issues today. ASPER
pioneered research and program evaluation methods during the Nixon and
Ford administrations. In the Carter years, ASPER’s focus moved to address-
ing problems of inflation, unemployment, and low productivity growth.
During the Reagan years, ASPER became ASP.

In preparing my remarks, I asked Dan Hamermesh, former director of
research at ASPER, to recall his time at ASPER. He e- mailed the following
response and granted permission to reproduce it here:

First, Orley Ashenfelter was in charge of Evaluation (the E in ASPER) at
ASPER 1972–73; George Johnson did it 1973–74, and Ernie Stromsdorfer did it
1974–77. A career bureaucrat, non- economist, ran Research (the R in ASPER)
for 2 years, then I was asked to be the first outsider, did it 1974–75 (thus getting
to be in D.C. at the denouement of Watergate, and having the pleasure of remov-
ing the Nixon picture from my wall on August 9, 1974). Frank Stafford took over
from me, did 1975–76, and Al Gustman did 1976–77. Under Carter, they re-
organized, and there were no academic temporaries in similar positions until the
Clinton Administration.

586 ILRREVIEW

For me, ASPER was a career- changing experience. My dissertation (finished
Fall 1968) was on labor demand, but I hadn’t done anything on it thereafter.
During the recession of the time I was asked by Paul O’Neill, then Deputy Bud-
get Director, later Secretary of the Treasury under W, about justifications in
terms of labor- demand elasticities for ideas about wage subsidies and their ef-
fects. That resulted in my survey papers, JHR 1976, 1979, my 1986 Handbook
paper, and ultimately my 1993 magnum opus, Labor Demand (in the Preface of
which I thank Paul O’Neill).

I believe Orley’s work on the “Ashenfelter dip” was stimulated by questions
that came up while he was at ASPER; and I know George Johnson’s interests were
also re- directed. Same for Al Gustman—he hadn’t done anything on retirement
before then, but it has been most of his career since then. Looking at the records
of the 5 of us, I would say that only Frank Stafford’s career was not greatly af-
fected by our time in ASPER.

I also asked Dan about a story I heard from Orley Ashenfelter about his
use of unemployment insurance data to predict the unemployment rate,
and being very successful in that effort. Here is Dan’s response:

In terms of your question about predicting the unemployment rate (CPS
rate), the correct story is as follows: I had developed an equation relating the
monthly insured unemployment rate (X) to the CPS rate (Y). Since the IUR
came out a week ahead of the CPS rate, this allowed me to get a prediction of the
CPS rate. Apparently the then- Secretary of Labor, John Dunlop, heard about it,
probably from my Assistant Secretary, and got involved in a betting pool [on the
unemployment rate] with the then Secretary of Treasury (William Simon), the
Director of what is now OMB, and, I think, a few others. So for my last 4 months
there (through August 1975), Dunlop would ask me what my model predicted.
Indeed, I was lying on the couch one Saturday morning in our rented house, and
my wife answered the phone to hear this gruff voice asking for me. Dr. John had
one question, of course, which I answered. Apparently my forecasts were pretty
good, because he won the pool more often than the other bettors!!!

Anyway, an absolutely delightful question, great reminiscing for this old fogey.

We still use UI data to predict the unemployment rate, but instead of the
IUR, initial UI claims have proved to be the best real- time, high- frequency
predictor of the unemployment rate and job gains.

Developing Talent

Even before ASPER was started, the labor department was actively involved
in recruiting and developing the human capital necessary to conduct re-
search on labor markets and labor- management relations. Under Howard
Rosen’s leadership, the Manpower Development and Training Administra-
tion (MDTA), the forerunner of ETA, founded a highly successful disserta-
tion grant program. From 1966 through the 1970s, the department gave out
more than 300 dissertation fellowships. The average grant in 1972 was
$10,000; in today’s dollars that is $55,000. Students were required to work
on policy- related topics and to present their findings in person at DOL. Half
of the grants went to economics PhD students, about 20% went to sociology
students, and the remaining 30% were spread over scholars in industrial and

DOL AT THE INTERSECTION OF RESEARCH AND POLICY 587

labor relations, business administration, education, psychology, and politi-
cal science.

Table 1 reports several of the recipients of these grants. Many of these
scholars are influential in academia and policy. Bob Groves became the di-
rector of the Census Bureau and is now the provost at Georgetown. Richard
Freeman and Jim Heckman need no description. Other notable recipients
include Fran Blau, Mike Boskin, Barry Hirsch, Marjorie Honig, Larry Kahn,
Harry Katz, Tom MaCurdy, Jim Medoff, Robert Moffitt, Paul Osterman,
Harvey Rosen, Jim Smith, and Kip Viscusi. These scholars and many other
recipients of the doctoral dissertation grant program have made major con-
tributions to policy- related research and profoundly influenced their fields.

While I have not conducted a rigorous cost- benefit analysis of the disser-
tation program, I think it is a safe bet that taxpayers received a good return
from this investment. When I served as the chief economist at the labor de-
partment, Mary Eccles and I tried to resuscitate this program and made a
fair amount of progress. Despite getting commitments from agencies at
DOL to use some of their budget to restart the dissertation program, we
were unable to get it started because Secretary Reich feared that it would
look like pork to Congressional appropriators and be at risk of being cut.
But I do think that the dissertation grant program served as a model for the
government, and one which will likely be followed by other fields, such as
international development.

Institutional Capacity

The department also helped develop institutional research capacity outside
of DOL. A good example is the founding of MDRC (Manpower Demonstra-
tion Research Corporation). MDRC is a nonprofit research organization
that has conducted invaluable research on job training, job search assis-
tance, and welfare reform, among other topics. MDRC was founded in 1974
by the Ford Foundation and a consortium of federal departments, led by

Table 1. Sample of Alumni of Doctoral Dissertation Grant Program

Steven Allen Linda Datcher Joseph Hotz Craig Olson
Thomas Barocci Gregory DeFreitas H. Allan Hunt Paul Osterman
John Barron Thomas DePrete Michael Hurd Anthony Pellechio
Andrea Beller Mary Eccles William Johnson Jeffrey Perloff
Suzanne Bianchi Ronald Ehrenberg Lawrence Kahn Robert Reischauer
Francine Blau David Featherman Harry Katz Myron Roomkin
Richard Block Randall Filer Morris Kleiner Harvey Rosen
Barry Bluestone Robert Flanagan Leonard Kreider Laurence Seidman
Michael Boskin Richard Freeman Robert Lerman James Smith
Steven Braun John Geweke Robert Lucas Charlotte Stiglitz
Richard Butler Robert Groves Thomas MaCurdy Nancy Tuma
George Cave Bennett Harrison Janice Madden Kip Viscusi
Andrew Cherlin James Heckman James Medoff Michael Wachter
Kim Clark Barry Hirsch Wesley Mellow Halbert White
Sheldon Danziger Marjorie Honig Robert Moffitt Kenneth Wolpin

588 ILRREVIEW

DOL, and that also included the Department of Health, Education, and
Welfare; the Department of Justice; and the Department of Housing and
Urban Development.

MDRC conducted the first large- scale randomized evaluation of an em-
ployment and training program, the National Supported Work Demonstra-
tion, which played a central role in research in labor economics and was
used, for example, by Robert LaLonde in his dissertation years later. To this
day, DOL sponsors MDRC research on critical topics such as youth transi-
tions to work and improving employment stability for low- wage workers.

In 1993, Bob Reich created a new office at DOL, the Chief Economist’s
Office. Reich’s motivation was twofold: he wanted a top economist who
would have cachet with the National Economic Council, another organiza-
tion that he proposed, and he wanted to give academic economists an op-
portunity to work in the labor department, which he thought would enrich
their research when they returned to academia.

This tradition continues today. Larry Katz was the first chief economist,
and Secretary Reich could not have found anyone better to interact with the
National Economic Council and to translate economic research that was rel-
evant to the department. One of Larry’s major achievements was during the
Reemployment Act, when he was able to apply evaluation results to incorpo-
rate job search assistance in One Stop Job Centers, which were also part of
the reemployment initiative under Secretary Reich. Perhaps most important,
he was able to persuade the Congressional Budget Office that job search as-
sistance would pay for itself, because even though there was an initial layout
of money, those who went through the program would find employment
more quickly and hence require less support from unemployment insurance
benefits. I put the finishing touches on an outstanding report that Larry had
started called “What’s Working and What’s Not in Employment and Training.”

Let me lastly turn to the Chief Evaluation Officer’s position. This is a new
office that was created under Secretary Hilda Solis’s leadership. Alex Mas
and the Office of Management and Budget provided critical support to es-
tablish this office, and it has become a gold standard for other departments.
The Chief Evaluation Officer’s role is to support evaluation research within
various departments and to help the department understand findings from
these evaluations.

At the labor department, one of the evaluation projects underway looks
at a very important part of the American Recovery and Reinvestment Act of
2009: a subsidy to help workers pay for health insurance under COBRA
if they lost their jobs during the recession. This was a generous subsidy of
about 65%.

The Office of Management and Budget has been building on this exam-
ple and acting director Jeffrey Zients issued a memorandum advising de-
partments to create a position like the Chief Evaluation Officer or another
high- rank position that incorporates the same functions. Key elements of
OMB’s initiative to strengthen agency evaluation capacity are described in
the part of Zients’s 2012 memo reproduced below:

DOL AT THE INTERSECTION OF RESEARCH AND POLICY 589

Memorandum to Heads of Executive Departments and Agencies

Office of Management and Budget, May 18, 2012

Strengthening agency evaluation capacity.

Agencies should have a high- level official who is responsible for program
evaluation and can: Develop and manage the agency’s research agenda; Conduct
or oversee rigorous and objective studies; Provide independent input to agency
policymakers on resource allocation and to program leaders on program man-
agement; Attract and retain talented staff and researchers, including through
flexible hiring authorities such as the Intergovernmental Personnel Act; and Re-
fine program performance measures, in collaboration with program managers
and the Performance Improvement Officer.

These goals can be accomplished by different kinds of leaders, ranging from
a chief evaluation officer who reports to the Secretary or Deputy Secretary to the
head of an independent institute in the agency. An existing official could play
the role, or a forceful new position could replace several less empowered ones.
OMB invites agencies to propose in their budget submissions ways to strengthen
the agency’s evaluation capacity, within tight resource constraints.

Support for Evidence- Based Initiatives

OMB invites your agency to participate in a number of forums to improve use
of evidence: OMB and the Council of Economic Advisers will organize a series of
topical discussions with senior policy officials and research experts in the agen-
cies. The meeting agendas will focus on administrative and policy levers for driv-
ing an increasing share of Federal investments into evidence- based practices. We
will plan summer meetings in order to help inform agencies’ evaluation plans
and budget submissions, and will also have follow- up meetings in the fall.

The Council of Economic Advisers has collaborated with OMB to work
with the departments to emphasize the importance of evaluating govern-
ment programs and to develop evaluation plans.

I don’t want to leave you with the impression that evaluation is easy or
that it fits in naturally in government, however. There are often conflicts of
interest. Government agencies have a tendency to want to control the flow
of information, especially if the information can be used to criticize their
programs. In the George W. Bush years, a first- rate Mathematica Policy Re-
search study of the Job Corps program that cost millions of dollars to con-
duct was suppressed for several years. But safeguards can be in put place to
limit conflicts of interest and to maximize the value of government sup-
ported policy research.

Challenges for the Research Community

I benefit from policy- related research in my current role. In my job as chair-
man of CEA, I am more a consumer of research than a producer of re-
search. As such, I would like to highlight a set of research questions that
would, in my view, help the council to develop and implement effective pol-
icy and to more effectively advise the president.

Broadly speaking, two types of research influence public policy. One in-
volves developing models of how markets and the macroeconomy work and

590 ILRREVIEW

estimating the key parameters underlying those models; the other evaluates
specific policies, such as COBRA subsidies.

An example of the former is the labor supply, or the job search, model.
This research takes years to develop and is typically not specific to a particu-
lar policy issue. The labor supply elasticity could therefore be applied to tax
policy or to many other issues. In fact, the Congressional Budget Office has
used econometric estimates of labor supply elasticities to