They receive this year's economics prize in Nobel's memory

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Published 11 October 2021 at 12.46

Domestic. The Royal Swedish Academy of Sciences has decided to award the Swedish Riksbank's prize in economic science in memory of Alfred Nobel 2021 to the American researchers David Card, Joshua D. Angrist and Guido W. Imbens.

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One half of the prize goes to David Card at the University of California, Berkeley, “for his empirical contribution to the labor market economy.”

The other half goes jointly to Joshua D. Angrist ( The Massachusetts Institute of Technology) and Guido W. Imbens (Stanford University) “for their methodological contribution to the analysis of causal relationships”.

Using natural experiments, David Card has analyzed the labor market effects of minimum wage, immigration, and education. His studies from the early 1990s showed, among other things, that higher minimum wages do not have to lead to fewer jobs.

Data from a natural experiment are difficult to interpret. For example, extending compulsory schooling by one year for group of students (but not others) does not affect everyone in the group in the same way. Some would have studied further anyway and the value of education for these particular students is often not representative of the whole group. Is it even possible to draw any conclusions about ef the effect of going one year longer in school? In the mid-1990s, Joshua Angrist and Guido Imbens solved this methodological problem and showed what conclusions about cause and effect can be drawn from natural experiments.

– Card's studies of important societal issues and Angrist and Imben's methodological efforts have shown that natural experiments are a rich source of knowledge. Their research is very helpful when decisions are made for the benefit of society, says Peter Fredriksson, chairman of the Economic Prices Committee, in a press release.