Trio win Economic Nobel Prize for research on labour economics

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admin November 10, 2021
Updated 2021/11/10 at 9:17 AM

On Monday, three economists from the United States were awarded the Nobel Prize in Economics for their groundbreaking work on the labour market effects of minimum wages, immigration, and education, as well as for developing the scientific framework that allows conclusions to be drawn from studies that cannot be conducted using traditional methods.

One-half of the prize went to Canadian-born David Card of the University of California in Berkeley, while the other half was split between Joshua Angrist of the Massachusetts Institute of Technology and Dutch-born Guido Imbens, 58, of Stanford University.

The three have “completely changed empirical work in the economic sciences,” according to the Royal Swedish Academy of Sciences.

“Card’s investigations of key societal issues, as well as Angrist and Imbens’ methodological contributions, have shown that natural trials are a valuable source of information,” stated Peter Fredriksson, head of the Economic Sciences Committee. “Their study has significantly increased our capacity to answer fundamental causal issues, which has had a significant societal impact.”

Card collaborated on a study that looked at the consequences of raising the minimum wage in eateries in New Jersey and eastern Pennsylvania. He and his late colleague Alan Krueger discovered that raising the hourly minimum wage had no effect on employment, defying the popular belief that raising the minimum wage would lead to reduced hiring.

Card’s research also called into question another widely held belief: that immigration lowers salaries for native-born employees. He discovered that fresh immigration benefits native-born people’s salaries, whereas older immigrants’ incomes are in danger of being harmed.

Angrist and Imbens each received half of the prize for figuring out the methodological challenges that allow economists to reach firm conclusions about causation and effect even when they can’t utilise precise scientific procedures.

The economics prize, unlike the other Nobel awards, was founded in Alfred Nobel’s memory by the Swedish central bank in 1968, with the first laureate chosen a year later. Every year, it is the final reward to be revealed.

 

 

Source: The Indian Express

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