STOCKHOLM: A U.S.-based economist won the Nobel Prize in Economics on Monday for pioneering research that has radically changed the perception of the workforce, showing how minimum wage increases don’t hinder employment and migrants don’t lower wages for native-born workers. Two more have shared this award for making.

David Card, of Canadian descent at the University of California, Berkeley, is awarded half of the prize for his research into how the minimum wage, immigration and education affect the labor market.



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The other half was shared by Joshua Angrist of the Massachusetts Institute of Technology and Guido Embence of Dutch descent at Stanford University for their framework for issues that could not rely on conventional scientific methods. All three have “completely reshaped the empirical work of the economic sciences,” the Royal Swedish Academy of Sciences said.

Together, the three helped to quickly expand the use of studies based on “natural experiments” or observations of real-world data. Such research makes economics more applicable to everyday life, provides real evidence of policy makers’ policy results, and over time gives rise to more popular methods of economics published by Stephen Dubner and Steven Levitt’s blockbuster bestseller “Free Economics”.

In a 1993 study, Card fast-food restaurants Burger King, KFC, Wendy and Roy Rogers looked at what happened when New Jersey raised its minimum wage from 4.25 to 0 5.05, using restaurants along the East Pennsylvania border for control. Comparison – Group. In contrast to previous research, he and his research partner Alan Krueger, who died in 2019, found that the minimum wage increase had no effect on the number of workers.


Card minimum wage research has fundamentally changed the opinion of economists about such a policy. As noted by The Economist magazine, a 1992 survey of members of the American Economic Association found that 79% agreed that a minimum wage law increased unemployment among young and low-skilled workers. Those views were largely based on the conventional economic concept of supply and demand: if you raise the price of something, you get less.

By 2000, however, only 46% of AEA members said the minimum wage law increased unemployment, largely due to Card and Kruger’s research.

Their research arouses interest in further research into why higher minimum employment should not be reduced. One conclusion was that companies were able to pay customers higher wage costs by raising prices. In other cases, if a company is the main employer in a particular area, it may be able to keep wages particularly low, so that it can pay a higher minimum wage when needed, without having to cut jobs. Higher wages will attract more applicants, increase labor supply.

“Really astonishing evidence on the impact of the minimum wage has shaken the field to a very basic level,” said Arindrajit Dubey, a professor of economics at the University of Massachusetts, Amherst, who copied and expanded Card and Kruger’s research. “And so for that reason, and all the subsequent research that has ignited their work, it’s a highly deserved reward.”


Dubey said Krueger would almost certainly have participated in the award, but the Nobel Prize in Economics was not awarded posthumously.

The card also found that influencing immigrants in a city does not cost local workers jobs or lower their income, although previously migrants could be negatively affected.

Card studied the labor market in Miami in the wake of Cuba’s sudden decision to emigrate in 1980, leaving 125,000 people known as Mariel Botlift. This has resulted in a 7% increase in city performance. Compared to the evolution of wages and employment in the other four cities, the card found no negative impact on the level of education of Miami residents. Follow-up work has shown that increased immigration can have a positive impact on the income of those born in the country.

Angrist and Imbes have won half their prizes for solving systemic problems that allow economists to make difficult decisions about causes and effects, even where they cannot be studied in strict scientific terms.


The work of the card at the minimum wage is the most well-known natural test of economics. The problem with this type of experimentation is that sometimes it can be difficult to distinguish between cause and effect. For example, if you want to know if an extra year of education will increase a person’s income, you can simply compare the income of an adult with one more year of schooling.

Yet there are many more things that can determine whether those who get an extra year of schooling are able to make more money. Perhaps they were hardworking or overworked and would earn more than them without extra years even if they were not in school. The reason such economists and other social science researchers say such problems “does not prove the effectiveness of interrelationships.”

Imbens and Angrist, however, find ways to isolate the effects of things like an extra year of school. Their methods have enabled researchers to make much clearer decisions about causes and effects, even if they can’t control who gets things like extra education, the way lab scientists can control their experiments.

“I was shocked to receive a telephone call at the time,” said Imbens from his home in Massachusetts. “And then I was absolutely thrilled to hear the news … that I was able to share it with Josh Angrist and David Card,” whom he called “two very good friends of mine.” Imbens said Angrist was the best person in his marriage.


“Of course I’m thrilled. … It’s a matter of pride to receive the Nobel Prize and especially to be recognized with my winners, you know, Guido Imbes and Dave Card, who are wonderful scholars and I couldn’t be happier,” Angrist said.

Krueger, who worked with cards in some Nobel Prize-winning studies, died in 2019 at the age of 58. He taught at Princeton for three decades and was chief economist at the Department of Labor under then-President Bill Clinton. He served in the Treasury Department under then-President Barack Obama, then as chairman of Obama’s Council of Economic Advisers. The Nobel Prize is not awarded posthumously.

The prize comes with a gold medal and 10 million Swedish kronor (over $ 1.14 million).

Unlike other Nobel Prizes, the Economics Prize was not established at the behest of Alfred Nobel but the Swedish Central Bank, in his memory in 1968, selected the first winner a year later. This is the last prize announced each year.

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