© Reuters. The Secretary General of the Royal Swedish Academy of Sciences Goran K. Hansson and the Academy’s 2021 Economic Science Prize Committee members Peter Fredriksson and Eva Moerk announced the Riksbank’s Economic Science Prize in commemoration of Alfred Nobel in 2021. The winners of David Card and Joshua Angrist’s Photo: Guido Imbens and Guido Imbens appeared on the screen at the press conference of the Academy held in Stockholm, Sweden on October 11, 2021. Claudio Bresciani/TT News Agency/Edited via Reuters Attention-This image is provided by a third party. Sweden is out. There are no commercial or editorial sales in Sweden.
Authors: Simon Johnson and Nicklas Pollard
STOCKHOLM (Reuters)-Economists David Card, Joshua Angrist and Guido Ibbens won the 2021 Nobel Prize in Economics on Monday for their groundbreaking “natural experiment” presentation From the increase in the minimum wage in the fast-food industry in the United States to immigration, the impact on the real world economy comes from Cuba in the Castro era.
Unlike medicine or other sciences, economists cannot conduct strictly controlled clinical trials. On the contrary, natural experiments use real-life situations to study the impact on the world, and this method has been extended to other social sciences.
“Their research has greatly improved our ability to answer key causal questions, which is of great benefit to society,” said Peter Frederickson, chairman of the Economic Science Award Committee.
The Nobel Prize in Economics in the past has been dominated by American institutions, and this time is no exception. Canadian-born Card is currently working at the University of California, Berkeley; Angrist, a dual citizen of the United States and Israel, studying at the Massachusetts Institute of Technology; and Dutch-born Ibns at Stanford University.
‘Very nuts and bolts’
An experiment conducted by the 65-year-old Card on the impact of the increase in the minimum wage in New Jersey in the early 1990s on the fast-food industry overturned the traditional view in economics that such an increase always leads to unemployment.
His work on this topic is often used in collaboration with the famous economist Alan Kruger, who died in 2019, and is used as empirical evidence to promote legislation, including the Biden administration’s US$15 minimum wage legislation.
Another studied the impact of Fidel Castro’s move in 1980 to allow all Cubans who wished to leave the country to leave the country. Despite subsequent immigration to Miami, Card found no negative wage or labor impact on Miami residents with low education.
“This is about trying to get more scientific connections and evidence-based analysis in economics,” Card initially thought his friend was joking when he received a call from Sweden, and told Berkeley’s website after the announcement. “Most old-fashioned economists are very theoretical, but nowadays, a large part of economics is really very specific.”
Steve Pischke, a professor of economics at the London School of Economics who studied with Card, said that the work of the three researchers in the use of natural experiments had a profound impact.
“It’s definitely huge,” Pischke said. “Everyone has been greatly affected, and I think… the research started to be conducted in a very different way, and it expanded to many areas of economics, which now often use these methods.”
‘Didn’t answer my call’
In an online briefing arranged by the Massachusetts Institute of Technology, Angrist described a recent project on the hot issues of entering elite public schools. He and other researchers found that graduates of these schools tend to perform well because of more choices. Sexual admission is related to education compared to it.
He said in an online briefing arranged by the Massachusetts Institute of Technology: “So basically we believe that for those who want to improve public education, entering that type of school should not be the primary concern of policy.”
Angrist, 61, said he missed the Nobel Committee call and had to get the phone number from another Nobel Prize winner.
“Initially, they didn’t answer my call,” he said. “Finally found the right person.”
The Nobel Committee pointed out that natural experiments are difficult to explain, but Angrist and Imbens solved methodological problems in the mid-1990s to show that precise conclusions about causality can be drawn from them.
58-year-old Ibns said in a conference call with reporters in Stockholm: “I was stunned when I received the call, and then I was so excited to hear the news.” Friends. Angrist is the best man at his wedding.
The award is officially known as the Riksbank Memorial Alfred Nobel Prize in Economics. It is the last batch of Nobel Prizes this year. The winners will share 10 million Swedish kronor (1.14 million U.S. dollars).
The prestigious scientific, literary and peace achievement awards were established and funded by the will of the Swedish inventor and wealthy businessman Alfred Nobel.
They have been awarded since 1901, although the Economics Prize-established by donations from the Riksbank on the 300th anniversary of its founding-was added later and was first awarded in 1969.
(1 USD = 8.7275 Swedish Krona)