Fresno, California 2021-10-11 09:43:05 –
The University of California, Berkeley’s Canadian-born David Card was awarded half of his award for his work on how minimum wages, immigration and education affect the labor market.
The other half was shared by Joshua Angrist of the Massachusetts Institute of Technology and Guido Imbens, a Dutch-born student at Stanford University, on a framework for studying problems that cannot rely on traditional scientific methods.
The Royal Swedish Academy of Sciences said the three “completely reshaped empirical research in economic science.”
The card looked at what happened when New Jersey used a restaurant adjacent to eastern Pennsylvania as a control or comparison group to raise the minimum wage from $ 4.25 to $ 5.05. In contrast to previous studies, he and his research partner, Alan Krueger, died in 2019 and found that raising the minimum wage did not affect employee numbers.
The Card Minimum Wage Survey has fundamentally changed the view of economists on such policies. As economists point out, a 1992 survey of members of the American Economic Association found that 79% agreed that the minimum wage law would increase unemployment for young and unskilled workers. understood. These views were primarily based on the traditional economic views of supply and demand. If you raise the price of something, it will decrease.
But by 2000, only 46% of AEA members said the minimum wage law would increase unemployment, primarily due to the Card and Kruger survey. Their findings have sparked interest in further research into why higher minimums do not reduce employment. One conclusion was that by raising prices, companies could pass on the cost of higher wages to their customers. Also, if the company is a major employer in a particular region, wages may have been kept particularly low. Therefore, you can afford to pay a higher minimum wage without reducing employment. Higher wages will also attract more applicants and boost labor supply.
The card also found that the income of native-born workers can benefit from new migrants, but early arriving migrants are at risk of being adversely affected. To study the impact of immigrants on work, Card compares Miami’s labor market following Cuba’s sudden decision to relocate people in 1980, so that 125,000 people are known as Mariel boat lifts. I left the place where it became. As a result, the city’s workforce has increased by 7%. By comparing wage and employment changes in four other cities, the card found no negative impact on poorly educated Miami residents. Follow-up work has shown that increased immigration can have a positive impact on the incomes of people born in the country.
Angrist and Imbens win half of the award for solving methodological problems that allow economists to draw firm conclusions about causes and consequences, even when they are unable to conduct research according to rigorous scientific methods. Did.
The study of card minimum wages was an example of a “natural experiment.” The problem with such experiments is that it can be difficult to identify the cause and effect. For example, if you want to know if a year’s education will increase a person’s income, you can easily compare the income of an adult who has a year of school education with an adult who does not.
Still, there are many other factors that may determine whether a person with a year of schooling can make more money. Perhaps they were more diligent and diligent, and even if they didn’t stay in school, they made more money than those who didn’t have an extra year. This kind of problem causes economists and other social science researchers to say that “correlation does not prove causality.”
However, Invens and Angrist have developed statistical methods to avoid these challenges and to more accurately determine what can really be said about the causes and effects of natural experiments.
“I was really surprised when I got a call,” Invens said from his home in Massachusetts. “Then I was really excited to hear this news … I was able to share this with Josh Angrist and David Card,” he called “my very good friend.” Invens said Angrist was the best man at his wedding.
Kluger, who worked with Card in some of the Nobel Prize-winning studies, died in 2019 at the age of 58. He taught at Princeton for 30 years and was Chief Economist at the Ministry of Labor under then-President Bill Clinton. He worked for the Treasury under then-President Barack Obama and later chaired Obama’s Council on Economic Advisers. The Nobel Prize will not be awarded after death.
The award comes with a gold medal and SEK 10 million (over $ 1.14 million).
Unlike other Nobel Prizes, the Economics Award was not established at the will of Alfred Nobel, but was remembered by the Central Bank of Sweden in 1968, and the first winner was selected a year later. .. This is the last award announced every year.
Rugaber reported from Washington and McHugh reported from Frankfurt, Germany.
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Economics Nobel Prize 2021 winners are 3 US-based economists for research on wages, jobs Source link Economics Nobel Prize 2021 winners are 3 US-based economists for research on wages, jobs