Three United States-based economists were on Monday awarded the Nobel Prize for economics for their research about use of “natural experiments” on the impact of minimum wage, immigration and education on labour markets.
Natural experiments use real-life situations to study impacts on the world as economists cannot conduct clinical trials like in medicine.
David Card of the University of California at Berkeley was awarded one half of the prize, while the other half was shared by Joshua Angrist from the Massachusetts Institute of Technology and Guido Imbens from Stanford University.
The Royal Swedish Academy of Sciences, which presents the Nobel Prize for economics every year, said that Card has been given the award “for his empirical contributions to labour economics”. Angrist and Imbens have been given the award “for their methodological contributions to the analysis of causal relationships”.
The Royal Swedish Academy of Sciences said that the works of all the three economists “revolutionised empirical research in the social sciences” and helped researchers answer questions of great public importance.
“The 2021 economic sciences laureates have provided us with new insights about the labour market and shown what conclusions about cause and effect can be drawn from natural experiments,” the academy said. “Their approach has spread to other fields and revolutionised empirical research.”
It said that Card analysed the effects of minimum wages, immigration and education on the labour market.
The academy added that Angrist and Imbens developed a research framework that many researchers who work with observational data have adopted.
Card will get a prize amount of 5 million Swedish kronor, and Angrist and Imbens will get 2.5 million Swedish kronor each.
In 2020, the Nobel Prize for economics was awarded to United States-based economists Paul R Milgrom and Robert B Wilson for improving commercial auction and inventing new auction formats.