On Monday, three American-based economists have won the “2021 Nobel Prize” for economics for pioneering research on concluding so-called “natural experiments.” Joshua Angrist from the Massachusetts Institute of Technology, Guido Imbens from Stanford University, and David Card of the University of California at Berkley were among the winners.
Their research shed new light on such thorny problems as least wages raise versus employment growth and the influence of immigration on native-born staffers.
The Royal Swedish Academy of Sciences, which is responsible for selecting the Laureates in Economic Sciences, stated the three had entirely “re-shaped empirical work in the economic sciences.”
The 2021 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded with one half to David Card and the other half jointly to Joshua D. Angrist and Guido W. Imbens.#NobelPrize pic.twitter.com/nkMjWai4Gn
— The Nobel Prize (@NobelPrize) October 11, 2021
Canadian-born David Card was awarded of the prize for his research on minimizing wage, immigration, and education influence the labor market. And the other half prize was shared by Dutch-born Guido Imbens and Joshua Angrist for their work for analyzing problems that couldn’t rely on conventional scientific research.
In research published in 1993, Card looked at what happened to employments at KFC, Burger King, Wendy’s, and Roy Rogers when New Jersey increased its minimum wages from 4.25 to 5.05 dollars, using restaurants in eastern Pennsylvania as the control group. In contrast to earlier studies, he and his late studies partner Alan Krueger found that “raising the minimum wage had no impact on the number of workers.”
“A Gold Medal with 10M Swedish Krona”
Krueger and Card’s study fundamentally changed economists’ opinions of such policies. As The Economist magazine noted, in 1992, a survey of the US Economic Association’s members found that 79 percent agreed that a minimum wage law raised unemployment among lower-skilled employees. Moreover, those opinions are built on conventional economic ideas of supply and demand; if we increase the price of something, we get less of it.
However, by 2000, only 46 percent of the AEA’s members stated minimum wage laws raised unemployment, mainly because of Krueger and Card.
Imbens told reporters while speaking by phone from his home that he was sleeping when the call came. He said that he was just completely surprised then to receive a telephone call. And then he was just completely excited to hear the news, a specific kind of listening that he got to share that with David Card and Joshua Angrist were both very good friends of him.
The award comes with a “Gold Medal and 10M Swedish krona” (over 1.14 million dollars).
The 2021 Nobel Peace Prize was awarded last week to journalists Dmitry Muratov of Russia and Maria Ressa of the Philippines for their fight for “freedom of expression” in states where the media have experienced harassment, persistent attacks, and even murder. Ressa was the only female honored in any category in 2021.