The 2021 Nobel Prize in Economics is being shared by three professors of economics at universities in the United States: David Card, Joshua D. Angrist, and Guido W. Imbens. Card is on the faculty of the University of Berkeley, California, Angrist is at the Massachusetts Institute of Technology (MIT), and Imbens is at the Stanford Graduate School of Business.
Officially the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, the prize includes a cash award of 10 million Swedish krona (about $1.1 million at the current exchange rate) and a gold medal.
2021 Nobel Prize in Economics
- The Nobel Prize in Economics was awarded to three economics professors at U.S. universities.
- The prize recognizes their work in determining causal relationships in society.
- Their work is being used in other fields.
'Revolutionized Empirical Research'
The statement issued by the Nobel committee indicated that all three economists had "provided us with new insights about the labor market and shown what conclusions about cause and effect can be drawn from natural experiments." More specifically, the "natural experiments" used by the three winners examined how "chance events or policy changes result in groups of people being treated differently, in a way that resembles clinical trials in medicine."
Peter Fredriksson, chair of the Economic Sciences Prize Committee, observed that the three economists have demonstrated that natural experiments are a "rich source of knowledge." He added, "Their research has substantially improved our ability to answer key causal questions, which has been of great benefit to society."
The Nobel committee hailed the winners for having "revolutionized empirical research." The statement also indicated that the methodologies developed by these researchers have been used in fields other than economics.
Labor Market Impacts
Card used natural experiments to examine the impact of minimum wages, immigration, and education on the labor market. Based on research from the early 1990s, he concluded that increases in the minimum wage do "not necessarily lead to fewer jobs."
Angrist and Imbens used Card's studies as a springboard for their own work. They developed methodologies for improving the interpretation of data gathered in such natural experiments.