MercoPress. South Atlantic News Agency

Nobel Economic 2021 Prize goes to US-based trio

Card was awarded one half of the prize, while the other half was split between Angrist and Imbens.

David Card, Joshua D Angrist, and Guido W. Imbens have been awarded the Nobel Prize in Economics Monday for their research “drawing conclusions from unexpected experiments” applied to labor market analysis.

 In making its decision, the Royal Swedish Academy of Sciences said the chosen economists “have shown that many of society's big questions can be answered” through “natural experiments, situations that arise in real life which resemble random experiments.”

The winners “have provided new insights into the labor market and have shown what conclusions about cause and effect can be drawn from natural experiments,” the Academy added and their “approach has spread to other fields and has revolutionized empirical research.“

”Using natural experiments, [the Canadian-born] Card has analyzed the effects of the minimum wage, immigration and education in the labor market,“ specified the Swedish institution, while Angrist and Imbens ”showed what conclusions about cause and effect can be drawn from natural experiments. The framework they developed has been widely adopted by researchers working with observational data.“

The new developments have “revolutionized empirical research in social sciences and significantly enhanced the ability of the research community to answer questions of great importance to all of us.”

The Nobel Prize in Economics was first introduced in 1969 in addition to the already existing in Physics, Chemistry, Literature and Peace.

Card, of the University of California at Berkeley, was awarded one half of the prize, while the other half was split between Joshua Angrist from the Massachusetts Institute of Technology and Dutch-born Guido Imbens, 58, from Stanford University.

“Card’s studies of core questions for society and Angrist and Imbens’ methodological contributions have shown that natural experiments are a rich source of knowledge,” said Peter Fredriksson, chair of the Economic Sciences Committee. “Their research has substantially improved our ability to answer key causal questions, which has been of great benefit for society.”

Card worked on research that used restaurants in New Jersey and in eastern Pennsylvania to measure the effects of increasing the minimum wage. He and his late research partner Alan Krueger found that an increase in the hourly minimum wage did not affect employment, challenging conventional wisdom which held that an increase in minimum wage will lead to less hiring. He also challenged the idea that immigrants depress wages for native-born workers. He found that incomes of the native-born can benefit from new immigration, while it is earlier immigrants who are at risk of being negatively affected.

Angrist and Imbens won their share of the award for working out the methodological issues which enable economists to draw solid conclusions about cause and effect even where they cannot carry out studies according to strict scientific methods.

Economics is the only item not instituted by Alfred Nobel himself, but by the Swedish Central Bank rather. Since it was first awarded in 1969, Americans have dominated the prize, and only two women have won it.