Three US-based economists win Nobel Prize for societal research

NEW DELHI: Three US based economists will share this year's Nobel Memorial Prize in Economic Sciences for their innovative work, 'natural experiments' invovling events or policy changes in real life that allow researchers to analyze their impact on society. 

The study showed that an increase in minimum wage did not lead to less hiring and immigrants did not lower pay for native-born workers, challenging commonly-held ideas. 

The Royal Swedish Academy of Sciences announced on Monday that David Card of the University of California at Berkeley will receive half the prize, worth 10 million Swedish kronor, or about US$1.1 million, Joshua Angrist of the Masschusetts Institute of Technology and Guido Imbens of Stanford University will share the other half.

According to the Nobel Academy the three had '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, the 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," he added.

Contrary to previous studies, Card and his late research partner, Alan Krueger, found that an increase in the minimum wage had no effect on the number of employees. Card later did further work on the issue. 

Overall, the research concluded that the negative effects of increasing the minimum wage were small and significantly smaller than believed 30 years ago, the Nobel committee said. 

Card also found that incomes of those who were native born to a country could benefit from new immigrants, while immigrants who arrived earlier were the ones at risk of being negatively affected. 

Angrist and Imbens won their half of the award for working out the methodological issues that allowed economists to draw definite conclusions about cause and effect even where they cannot carry out studies according to strict scientific methods. 


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