Three U.S.-based professors with Harvard ties received the Nobel Prize in Economic Sciences on Monday for their work on minimum wage and natural experiments.
The Royal Swedish Academy of Sciences awarded the annual prize in memory of Alfred Nobel to David E. Card of the University of California, Berkeley, Joshua D. Angrist of MIT, and Guido W. Imbens of Stanford University. Half of the $1.1 million prize went to Card for challenging the “conventional wisdom” to show that increasing the minimum wage does not necessarily decrease employment, while Angrist and Imbens received the other half for their work demystifying the process of natural experiments.
Imbens previously taught at Harvard for more than a decade, from 1990 to 1997 and 2006 to 2012. Angrist and Imbens’ work, which began during the latter’s tenure at Harvard in the 1990s, deciphered how to obtain “precise conclusions about cause and effect” from natural experiments. Natural experiments analyze events in the real world — such as fluctuations in the minimum wage — without the controlled environment of a laboratory.
Angrist was an assistant professor at Harvard from 1989 to 1991, while Card served as a visiting professor in 2008.
More recently, Card filed an analysis in federal court in 2018 as an expert witness in support of the University’s race-conscious admissions practices after Harvard was sued by anti-affirmative action group Students for Fair Admissions. Card’s analysis found “no negative effect of Asian-American ethnicity” in Harvard’s admissions process.
Card said in an interview that his research in labor economics began in the 1990s when he worked with Alan B. Krueger at Princeton, whom Card said would have been a co-recipient of the Nobel Prize were he alive.
He said his research challenged the prevailing assumption in economics from 1890 to 1990, which assumed that “if you raise the minimum wage 10 cents, somebody's gonna lose their job.” A study he and Krueger designed using a natural experiment comparing minimum wages in Pennsylvania and New Jersey found this was not necessarily the case, which drew “a lot of disbelief from economists.”
Peter Fredriksson, chair of the Economic Sciences Prize Committee, said in a press release that taken together, the three winners’ research demonstrates that “natural experiments are a rich source of knowledge.”
“Their research has substantially improved our ability to answer key causal questions, which has been of great benefit to society,” Fredriksson said.
Economics professor David I. Laibson ’88 said he is “thrilled” the trio has been awarded the “highest honor in our profession.”
“I am a huge fan of all of the work that they have done,” Laibson said. “David Card has been one of the most influential economists in the world. During my career, he has influenced all of us with his path-breaking work.”
“The most important thing that their work did is open the door to studies across the social sciences … trying to use natural experiments to answer some of the most important policy questions that we face,” Laibson added.
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