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Causation hindsight

(From left) David Card of the University of California, Joshua Angrist from the Massachusetts Institute of Technology and Guido Imbens from Stanford University won the economics Nobel. afp & reuters (Photo: AFP & Reuters)Premium
(From left) David Card of the University of California, Joshua Angrist from the Massachusetts Institute of Technology and Guido Imbens from Stanford University won the economics Nobel. afp & reuters (Photo: AFP & Reuters)

Their research work revealed hidden aspects of the labour market and helped identify what conclusions on cause-and-effect relationships could be drawn from ‘experiments’ that aren’t researcher-staged but still offer comparative data that allows some hypotheses to be tested

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Three US-based economists share this year’s Nobel prize in Economics. One half has been awarded to David Card, while the other was split between Joshua D. Angrist and Guido W. Imbens. The three laureates “completely reshaped empirical work in the economic sciences", said the award committee, which sought to highlight the knowledge-yielding value of “natural experiments". Their research work revealed hidden aspects of the labour market and helped identify what conclusions on cause-and-effect relationships could be drawn from ‘experiments’ that aren’t researcher-staged but still offer comparative data that allows some hypotheses to be tested.

Card analysed the effects of minimum wages, immigration and education on the US labour market. His research showed, for example, that raising the wage floor did not necessarily lead to fewer jobs, as many had supposed. Meanwhile, Angrist and Imbens created a scientific framework to catch causation. Their work gave empirical data interpretation a big leap and answered many riddles. This part, being more general, may also be more relevant to us. India’s labour market, after all, is poles apart from America’s.

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