Nobel Economics goes to societal research pioneers
Stockholm: A US-based economist won the Nobel prize for economics Monday for pioneering research that showed an increase in minimum wage doesn't lead to less hiring and immigrants do not lower pay for native-born workers, challenging commonly held ideas. Two others shared the award for creating a way to study these types of societal issues.
Canadian-born David Card of the University of California, Berkeley, was awarded one half of the prize for his research on how minimum wage, immigration and education affect the labour market, while the other half was shared by Joshua Angrist from the Massachusetts Institute of Technology and Dutch-born Guido Imbens from Stanford University for their framework for studying issues that can't rely on traditional scientific methods. The Royal Swedish Academy of Sciences said the three have "completely reshaped empirical work in the economic sciences." "Card's studies of core questions for society and Angrist and Imbens' methodological contributions have shown that natural experiments are a rich source of knowledge," said Peter Fredriksson, chair of the Economic Sciences Committee.
"Their research has substantially improved our ability to answer key causal questions, which has been of great benefit for society."
Card looked at what happened when New Jersey raised its minimum wage from $4.25 to $5.05, using restaurants in bordering eastern Pennsylvania as a comparison group. Contrary to previous studies, he and his late research partner Alan Krueger found that an increase in the minimum wage had no effect on the number of employees.