October 20, 2021

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Three-part Nobel Prize in Economics - E24

Three-part Nobel Prize in Economics – E24

The Nobel Prize in Economics has been awarded to David Card, Joshua D. Angrist, and Guido W. Imbens.

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He will appear at a press conference in Stockholm on Monday.

David Card received the award “for his empirical contribution to labor market economics,” while Joshua de Angreste and Guido Empains received the award “for their systematic contribution to the analysis of causal relationships,” as reported in Rationale.

Card’s studies of important societal issues and the efforts of Angrist and Imben have shown that natural experiences are a rich source of knowledge. The chair of the prize committee, Peter Fredrickson, says their research helps a lot when making decisions for the good of society.

The award is officially named the Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel. First distributed in 1969, it is not part of Alfred Nobel’s will.

This year, the prize winners share a sum of 10 million Swedish kronor. David Card gets half, while the other half is shared by Joshua Ingreste and Guido Impines.

That’s why they won

The panel notes that David Card analyzed the labor market effects of minimum wages, immigration, and education using natural experiments.

“His studies in the early 1990s challenged conventional wisdom, leading to new analyzes and other insights,” the committee wrote.

Among other things, they show that raising the minimum wage does not necessarily lead to fewer jobs. Studies also show that those born in a country can often benefit financially from new immigration, while those who immigrated earlier may be negatively affected, the commission wrote.

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“But data from natural experiences are difficult to interpret. For example, extending a year’s compulsory education to one group of students (and not another group) does not affect everyone in the group in the same way,” she says.

However, this methodological problem was solved by Joshua Angrist and Guido Imbens in the mid-1990s, when they demonstrated the conclusions about cause and effect that could be drawn from natural experiments, the committee wrote.

Three Norwegians and two women

The first Nobel Prize in Economics was awarded to the Norwegian Ragnar Frisch and the Dutchman, Jan Tingbergen, in 1969.

Since then, two other Norwegians have received the award: Trygve Haavelmo in 1989 and Finn Kydland in 2004.

So far, a total of 89 people have received the award. These include two women: Elinor Ostrom in 2009 and Esther Duflo in 2019.