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Nobel economics prize 2021 goes to 'natural experiments' pioneers

The prizes, for achievements in science, literature and peace, were created through a bequest in the will of Swedish dynamite inventor and wealthy businessman Alfred Nobel (Photo: AFP)Premium
The prizes, for achievements in science, literature and peace, were created through a bequest in the will of Swedish dynamite inventor and wealthy businessman Alfred Nobel (Photo: AFP)

  • Nobel prize for excellence in various arts of humanity were awarded since 1,901.
  • Last year's Nobel prize in economics went to two Stanford University economists Paul R Milgrom and Robert B Wilson

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The 2021 Nobel Prize for economic sciences has been awarded in one half to Canadian-born David Card and the other half jointly to Israeli-American Joshua D Angrist and Dutch-American Guido W Imbens.

David Card is a Canadian labour economist and Professor of Economics at the University of California, Berkeley.  He has been awarded the 2021 prize “for his empirical contributions to labour economics."

Using natural experiments, David Card has analysed the labour market effects of minimum wages, immigration and education.

His studies from the early 1990s challenged conventional wisdom, leading to new analyses and additional insights. The results showed, among other things, that increasing the minimum wage does not necessarily lead to fewer jobs.

"We now know that the incomes of people who were born in a country can benefit from new immigration, while people who immigrated at an earlier time risk being negatively affected. We have also realised that resources in schools are far more important for students’ future labour market success than was previously thought," the Nobel Committee said.

Meanwhile, Joshua D Angrist and Guido W Imbens got the prize “for their methodological contributions to the analysis of causal relationships."

In the mid-1990s, Joshua Angrist and Guido Imbens demonstrated how precise conclusions about cause and effect can be drawn from natural experiments.

The researchers were honoured for providing us "with new insights about the labour market" and showing "what conclusions about cause and effect can be drawn from natural experiments", the Nobel committee said in a statement

The prize winners share share a sum of 10 million Swedish crowns or $1.14 million.

The prize in economics, formally known as the Sveriges Riksbank Prize in Economic Sciences, is the last of this year's crop of Nobels.

Nobel prizes for excellence in various arts of humanity were awarded since 1,901. The prizes, for achievements in science, literature and peace, were created through a bequest in the will of Swedish dynamite inventor and wealthy businessman Alfred Nobel.

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.

Last year's economic prize went to two Stanford University economists Paul R Milgrom and Robert B Wilson who tackled the tricky problem of making auctions run more efficiently.

In 2019, colleagues and married couple Esther Duflo and Abhijit Banerjee received the Nobel prize in economic sciences. They shared the award with colleague Michael Kremer.

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 given to UK-based Tanzanian writer Abdulrazak Gurnah, who was recognised 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.

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