Three US-based economists have won the Nobel Prize for Economics for 2021. The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences, in memory of Alfred Nobel, to David Card, 65, Joshua D. Angrist, 61, and Guido W. Imbens, 58.
The three economists were credited for providing additional insights and data on how labour markets behave, and the causality of different experiments.
David Card, Professor of Economics at the University of California, Berkeley, USA was given the prize “for his empirical contributions to labour economics”, Joshua Angrist from the Massachusetts Institute of Technology, Cambridge, USA, and Guido Imbens from Stanford University, USA were recognised for their work “for their methodological contributions to the analysis of causal relationships”.
“This year’s Laureates – David Card, Joshua Angrist and Guido Imbens – have provided us with new insights about the labour market and shown what conclusions about cause and effect can be drawn from natural experiments. Their approach has spread to other fields and revolutionised empirical research,” The Royal Swedish Academy of Sciences said.
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Canadian-born Card studied the effects of minimum wages, immigration and education on the labour market in the early 1990s. Against the conventional wisdom of the time, Card along with his late research partner Alan Krueger, was one of the first to come to the analysis that increasing minimum wages would not lead to fewer jobs.
His work on comparative analysis of the US and Canada highlighted how immigration, now a very politicised vote point, leads to negligible to no impact on wage levels for people born in the country. Card’s work that highlighted the importance of schooling for changing labour markets was also seminal.
Angrist, a former doctoral student of Card and Krueger, is one of the top economists in labour economics, urban economics, and the economics of education, and is one of the most influential economist researchers of the time. He has worked on issues from research on the determinants of student learning to identifying causal relationships in labour markets with his quasi-natural experiments.
Imbens, a frequent collaborator of Krueger and Angrist, was instrumental in developing the methodologies to conduct the natural experiments that were used to identify causal relationships in the real world. Imbens introduced a model called Local Average Treatment Effect (LATE) that helped researchers to draw causal inferences from observational data in collaboration with Angrist. Imbens was also influential in developing econometrics tools so that researchers could link qualitative statements to quantitative data.
The prize of 10 million Swedish kronor was split in half between Card, and the other half being awarded jointly to Imbens and Angrist.
(Edited by : Anilkumar Narayan)