US-based economists Card, Angrist and Imbens win 2021 Nobel prize in economics

Card was recognized for his contributions to labor economics, while Angrist and Imbens won the award for their contributions to the analysis of causal relationships.

The award — the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel — comes with a 10 million Swedish krona ($1.1 million) cash prize and a gold medal.

Card, 65, is a professor of economics at the University of Berkeley, California. Angrist, 61, is Ford professor of economics at the Massachusetts Institute of Technology, and Imbens, 58, is a professor of economics at the Stanford Graduate School of Business.  

The Nobel committee said in a statement that the three winners had “provided us with new insights about the labour market and shown what conclusions about cause and effect can be drawn from natural experiments.” 

BREAKING NEWS:
The 2021 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded with one half to David Card and the other half jointly to Joshua D. Angrist and Guido W. Imbens.#NobelPrize pic.twitter.com/nkMjWai4Gn

— The Nobel Prize (@NobelPrize) October 11, 2021

Their approach had been used in other fields and had “revolutionized empirical research,” the committee added.

Natural experiments

The winners’ research had helped find the cause and effect behind certain big social questions, the committee said.

They did so using “natural experiments,” which looked at how “chance events or policy changes result in groups of people being treated differently, in a way that resembles clinical trials in medicine,” the committee explained.

Card had used natural experiments to analyze the effects of minimum wages, immigration and education on the labor market.

His research from the early 1990s has shown, for example, that increasing the minimum wage does “not necessarily lead to fewer jobs.”

Meanwhile, Angrist and Imbens had made it easier to interpret the data from these natural experiments, through their methodological contributions.

Imbens, speaking via phone to an audience in Stockholm, said that he was “thrilled” to find out he had been awarded the prize, and to share it with his “good friends” Card and Angrist, who was even the best man at his wedding.

He said that a career in economics was a “great choice” for young people because there were “so many interesting questions, in so many areas where economists do useful work, both in policy, as well as these days in many cases in the private industry.”

Peter Fredriksson, chair of the Economic Sciences Prize Committee, said the winners had shown that natural experiments are a “rich source of knowledge.”

“Their research has substantially improved our ability to answer key causal questions, which has been of great benefit to society,” Fredriksson added.

Last year, Stanford University economists Paul R. Milgrom and Robert B. Wilson were awarded the prize for their “improvements to auction theory and invention of new auction formats.”

The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel has been awarded 53 times to 89 winners between 1969 and 2021.

SOURCE: CNBC