Live

Watch CBSN Live

3 U.S.-based economists win economics Nobel Prize for work on "natural experiments"

Stockholm — Three U.S.-based economists have won the 2021 Nobel prize for economics for work on drawing conclusions from unintended experiments, or so-called "natural experiments." The winners were David Card of the University of California at Berkeley; Joshua Angrist from the Massachusetts Institute of Technology; and Guido Imbens from Stanford University. Their research has shed new light on such thorny issues as minimum wage hikes versus job growth and the impact of immigration on native-born workforces.
 
The Royal Swedish Academy of Sciences said the three had "completely reshaped empirical work in the economic sciences."

Card worked on research that used restaurants in New Jersey and in eastern Pennsylvania to measure the effects of increasing the minimum wage. He studied 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. Card later did further work on the issue. Overall, the work concluded that the negative effects of increasing the minimum wage are small and significantly smaller than believed 30 years ago, the Nobel committee said.

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

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

Speaking by phone from his home in Massachusetts, Imbens told reporters that he had been asleep when the call came.

"I was just absolutely stunned then to get a telephone call" he said. "And then I was just absolutely thrilled to hear the news, a particular kind of hearing that I got to share this with Josh Angrist and and David Card were both very good friends of mine."

The award comes with a gold medal and 10 million Swedish kronor, or a little over $1 million.

Unlike the other Nobel prizes, the economics award wasn't established in the will of Alfred Nobel but by the Swedish central bank in his memory in 1968, with the first winner selected a year later. It is the last prize announced each year, and is formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
 
Last year's prize went to two Stanford University economists who tackled the tricky problem of making auctions run more efficiently.
 
It also created an endearing moment when one had to knock on the other's door in the middle of the night to wake him up and tell him they had won.
 
Last week, the 2021 Nobel Peace Prize was awarded to journalists Maria Ressa of the Philippines and Dmitry Muratov of Russia for their fight for freedom of expression in countries where reporters have faced persistent attacks, harassment and even murder.
 
The Nobel Prize for literature was awarded to U.K.-based Tanzanian writer Abdulrazak Gurnah, who was recognized for his "uncompromising and compassionate penetration of the effects of colonialism and the fate of the refugee."
 
The prize for physiology or medicine went to Americans David Julius and Ardem Patapoutian for their discoveries into how the human body perceives temperature and touch.
 
Three scientists won the physics prize for work that found order in seeming disorder, helping to explain and predict complex forces of nature, including expanding our understanding of climate change.
 
Benjamin List and David W.C. MacMillan won the chemistry prize for finding an easier and environmentally cleaner way to build molecules that can be used to make compounds, including medicines and pesticides.
  

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.