Authors: David McHugh & David Cayton
Stockholm (Associated Press).-An American economist was awarded the Nobel Prize in Economics Monday for his groundbreaking research which showed that increasing the minimum wage would not result in a decrease in employment and that immigrants will not lower the wages of native-born workers. This is a challenge to the common view. These two share the award for creating a method for studying these social issues.
Half of the awards went to David Card, a Canadian-born researcher at the University of California Berkeley. Joshua Angrist, of the Massachusetts Institute of Technology, received the other half. His research on the effects of education, minimum wages and immigration on the labor market won him half of the awards. Guido Imbens from Stanford University, and Guido Imbens who was born in the Netherlands, are grateful for their research on problems that cannot be solved using traditional scientific methods.
According to the Royal Swedish Academy of Sciences, the three were “revolutionary empirical studies in the field of economic science”.
Peter Fredriksson is Chairman of the Economic Science Committee. He stated, “Card’s research into the core issues facing society and the methodological contributions by Angrist or Imbens demonstrate that natural experiment are a rich resource of knowledge.” “Their research has greatly enhanced our ability to answer key causal queries, which is of great value to society.”
Card examined what happened in New Jersey when the minimum wage was raised from $4.25 to $5.05. He used restaurants along the eastern border of Pennsylvania for a control group.
Contrary to prior research, Card and his late research partner Alan Krueger discovered that raising the minimum wage did not have an effect on the number employees. Card continued to research this topic. The Nobel Committee concluded that overall the negative effects of raising the minimum wages are much smaller than originally thought.
Card found that immigrants arriving earlier can have a positive impact on the income of those born in a country.
Angrist, Imbens were awarded half the prizes for their ability to solve methodological problems that enable economists draw reliable conclusions about causality even though they are not able to use strict scientific methods.
Ibns said that he had fallen asleep during a busy weekend when he called reporters from Massachusetts.
He said, “I was shocked when I got the call.” “Then, I was so excited when I heard the news… This news must be shared with Josh Angrist, David Card,” he said. They are “two very close friends of mine”. Imbens stated that Angrist was his best man at the wedding.
Kruger, who had collaborated with Card on some Nobel Prize-winning research, died in 2019 at the 58th anniversary of his death. For three years, he was a Princeton University professor and the chief economist of US Department of Labor. Under the direction of President Barack Obama, he served as the Chairman of the Obama Council of Economic Advisers. The Nobel Prize was not awarded posthumously.
The award includes a gold-medal and 10 million Swedish Kronors (more than 1.14 million US Dollars).