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David Card, Joshua Angrist and Guido Imbens Win Nobel in Economics 2021

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David Card has made a profession of learning unintended experiments to look at financial questions — like whether or not elevating the minimal wage causes individuals to lose jobs.

Joshua D. Angrist and Guido W. Imbens have developed analysis instruments that assist economists use real-life conditions to check massive theories, like how further training impacts earnings.

On Monday, their work earned them the 2021 Nobel Memorial Prize in Economic Sciences.

All three winners are based mostly in the United States. Mr. Card, who was born in Canada, works on the University of California, Berkeley. Mr. Angrist, born in the United States, is on the Massachusetts Institute of Technology, and Mr. Imbens, born in the Netherlands, is at Stanford University.

“Sometimes, nature, or policy changes, provide situations that resemble randomized experiments,” mentioned Peter Fredriksson, chairman of the prize committee. “This year’s laureates have shown that such natural experiments help answer important questions for society.”

The recognition was bittersweet, many economists noted, as a result of a lot of the analysis featured in the prize announcement was co-written by Alan B. Krueger, a Princeton University economist and former White House adviser who died in 2019. The Nobels aren’t sometimes awarded posthumously. Despite that word of disappointment, the economics occupation celebrated the information, crediting the winners for his or her work in altering the best way that labor markets in specific are studied.

“They ushered in a new phase in labor economics that has now reached all fields of the profession,” Trevon D. Logan, an economics professor at Ohio State, wrote on Twitter shortly after the prize was introduced.

Mr. Card’s work has challenged typical knowledge in labor economics — together with the concept greater minimal wages led to decrease employment. He was a co-author of influential research on that subject with Mr. Krueger, together with one which used the border between New Jersey and Pennsylvania to check the impact of a minimal wage change. Comparing outcomes between the states, the analysis discovered that employment at quick meals eating places was not negatively affected by a rise in New Jersey’s minimal wage.

Mr. Card has additionally researched the impact of an inflow of immigrants on employment ranges amongst native staff with low training ranges — once more discovering the impression to be minimal — and the impact of college useful resource ranges on pupil training, which was bigger than anticipated.

“I’m sure that if Alan were still with us, that he would be sharing this prize with me,” Mr. Card mentioned in a information convention, after recognizing Mr. Krueger’s contributions. He additionally famous that originally, when it got here to the minimal wage examine, “quite a few economists were quite skeptical of our results.”

David Neumark, an economist on the University of California, Irvine, who co-wrote a paper contesting Mr. Card and Mr. Krueger’s findings in the minimal wage examine, mentioned he nonetheless thought the work had information points — however added that there was little question that the methodology was necessary.

“They’ve all done great work — they’ve changed the way that labor economists do research,” Mr. Neumark mentioned of the three winners.

Mr. Angrist and Mr. Krueger tried in the early Nineteen Nineties to gauge how a lot profit individuals derive from additional years of training. To determine it out, they took benefit of the truth that college students born earlier in the yr can legally go away faculty sooner than these born later in the yr. Those born earlier tended to get much less training and additionally earned much less in a while. The impact of an extra yr of training, they estimated, was a 9 % improve in revenue.

That examine helped spur the extra work on analysis strategies that Mr. Angrist and Mr. Imbens later carried out. That contribution has reshaped the best way researchers take into consideration and analyze pure experiments, based on the Nobel committee.

The pair confirmed that it was potential to determine a transparent impact from an intervention in individuals’s habits — like a subsidy that may encourage individuals to trip bicycles to work — even when a researcher couldn’t management who took half in the experiment, and even when the impression assorted throughout people. They additionally got here up with a clear framework for such analysis that has elevated belief in it.

“The challenge, for me, has always been trying to understand, when people do empirical work, what exactly the methodological challenges are,” Mr. Imbens mentioned through phone in a information convention for the announcement.

Two American economists affiliated with Stanford, Paul R. Milgrom and Robert B. Wilson, received the 2020 Nobel in economics for enhancements to public sale principle. Abhijit Banerjee and Esther Duflo of M.I.T. and Michael Kremer of Harvard University received in 2019 for his or her experiment-based analysis in growth economics.

The award, formally referred to as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, has been given out since 1969.

Because the award is introduced in the midnight on the United States’ West Coast, two of this yr’s recipients have been woken up by telephone calls from Sweden informing them of their prize.

Mr. Imbens mentioned he was asleep when he obtained the decision from the prize committee — round 2 a.m. — and was “absolutely stunned” to listen to the information. He mentioned he was happy to win it alongside mates, noting that Mr. Angrist was the perfect man at his wedding ceremony.

Mr. Card thought {that a} buddy of his — whom he recognized solely as Tim — was pulling a prank on him, he mentioned.

“But then the phone number actually was a Swedish phone number,” he mentioned.