Stockholm: Three American economists have announced on Monday the Nobel Prize in Economics for their pioneering research. One of these proved that raising the minimum wage does not reduce the hiring of employees and that migrant workers do not reduce the wages of native workers. These findings are contrary to common belief. In addition, two other economists received the Nobel Prize for explaining how to study such social issues.
Economists who have been awarded the Nobel Prize include David Card of the University of California at Berkeley, Joshua D. Angrist of the Massachusetts Institute of Technology, and Guido Imbens of Stanford University.
Canadian-born Card explores how minimum wages, immigration, and education affect the labor market while accompanying Nobel laureates Angrist and Imbans research traditional scientific methods. The Royal Swedish Academy of Sciences said all three “completely replaced empirical work in economic science.”
“Card’s study of important questions for society and the methodological contributions of Angrist and Imbens showed that natural experiments are a rich source of knowledge,” said Peter Fredriksen, chairman of the Committee on Economic Sciences.
He added, “His research has greatly improved our ability to answer important questions, which is of great benefit to society.”
The card looked at what happened when New Jersey raised the minimum wage from $4.25 to $5.05. They used a restaurant bordering eastern Pennsylvania as a comparison group in the research. Contrary to previous studies, he and his late research fellow Alan Krueger found that the increase in the minimum wage had no effect on the workforce. Card later worked on the issue further.
The Nobel committee said that the overall conclusion of the research is that the negative effects of increasing the minimum wage are much less than they were 30 years ago. The card also found that the income of a country’s natives could benefit from new immigrants. Angrist and Imbens received the prize for their work on methodological issues, which allows economists to draw firm conclusions about cause and effect, even if they do not study it with strict scientific methods.
Imbenes, speaking on the phone from his home in Massachusetts, told reporters that he was sleeping after a busy weekend when the news broke. He said that he was thrilled to hear the news. Unlike other Nobel Prizes, the Nobel Prize in Economics was not instituted in the will of Alfred Nobel but was instituted by the Swedish central bank in his memory in 1968, with the first winner being chosen a year later. It is the last Nobel Prize announced each year.