The Nobel Prize in Economic Sciences for the year 2021 has been awarded to 3 people. The names of the three awardees are David Card, Guido Imbens, and Joshua Angrist. While David Card is a Canadian and is a Professor of Economics at the University of California, Berkeley, USA, Guido Imbens is a Dutch and a Professor of Economics at the Stanford University in the USA.
On the other hand, Joshua Angrist is an American citizen and is a Professor of Economics at the Massachusetts Institute of Technology in Cambridge, USA. This is the 57th time that a USA citizen has won a Nobel Prize in Economic Sciences. The U.K citizens come distant second with nine such awards.
The Royal Swedish Academy of Sciences declared the names of all the three awardees on Monday in Stockholm, Sweden. While half of the prize was awarded to David Card, the other half was given to the remaining two people. Interestingly, the Nobel Prize in Economic Sciences is also known as Sveriges Riksbank Prize.
Also, this is for the first time that Prizes are not divided equally amongst all three awardees. Previously, the prize money was divided equally, but there was an unequal distribution of it this time.
Their Contributions to Economic Sciences
David Card was awarded the Nobel prize for his “empirical contributions to labour economics.” Guido Imbens and Joshua D Angrist were given the prize for “methodological contributions to the analysis of causal relationships.” The academy further said – “The winners have demonstrated that many of society’s big questions can be answered. Their solution is to use natural experiments – situations arising in real life that resemble randomized experiments”.
This statement was vindicated when David Card and (late) Alan Krueger did a natural experiment. It was based on investigating how increased wages affect unemployment. By the process of natural experiment, David Card analyzed labor market effects of minimum wages, education, and immigration.
Also, the three economists gave new insights into the labor market. Through the process of natural experiments, the conclusions related to its cause and effect were found out. In a way, it revolutionized the method of empirical research.
Card’s experiment related to the minimum wage increase and its impact on the fast-food sector in the 1990s in New Jersey. Interestingly, it overturned the conventional theory that an increase in minimum wages leads to job losses. His work was the base on which the Biden government pushed forward the minimum wage increase to $15 from $12 in the Senate.
Another experiment of Card was based on the result of a Cuban government decision. In 1980, Fidel Castro allowed all Cuban citizens to leave the country if they wished to do so. Hence, a lot of them migrated to Miami. However, even after a high influx of people in Miami, there was no negative wage for residents with a low level of education.
The Importance of the Nobel Prize
Initially, Nobel Prize started in 1901 and was given in five different fields. The respective fields were Physics, Chemistry, Medicine, Literature, and Peace. It was in 1968 when Nobel prizes were awarded in the field of Economic Sciences for the first time. It is also considered the most prestigious award in the available fields.
The awards are given in the memory of Alfred Nobel, who was a Swedish chemist, industrialist, and Engineer. He is most famously known as the inventor of Dynamite. The awards are given every year in all six fields. The Nobel ‘laureate’ is awarded a gold medal, a diploma, and a cash award worth 10,000,000 SEK (Swedish Krona), which is the official currency of Sweden.
Interesting Points Related to the Nobel Prize
- A Nobel Prize cannot be shared with more than three awardees in a particular field.
- Nobel Prizes cannot be given posthumously. However, if a person is awarded the prize and he/she dies before receiving it in person, the awardee would be given the prize.
- Till now, 962 people and 25 organizations have been given prestigious awards a total of 603 times.
- In the history of Nobel Prizes, only four individuals have won the awards more than once.
- Each medal has an image of Alfred Nobel in the left profile on either side with his birth and death dates.
- The medals are plated with 18-carat green gold and 24-carat gold.
- On average, each medal weighs about 175 grams.