Money & Banking
Tragic loss for Nobel Prize winners
Economists David Card, Joshua Angrist, and Guido Imbens were awarded the 2021 Nobel Prize in Economics for their development of “natural experiments” that have since been used to answer some of society’s biggest questions.
The pioneering of this style of experiment has been significant for economists, who can’t use the randomised experiments or clinical trials that those in medicine and other sciences can.
Natural experiments work by using real-life situations to study the world, and have since been adopted by other social sciences.
Card was recognised for findings he made in the 1990s, alongside economist Alan Krueger.
Good morning to 2021 economic sciences laureate David Card!
Card’s wife Cynthia Gessele snapped this photo of him speaking to #NobelPrize’s Adam Smith (which he suspected might be a made-up name) right after he had heard the news.
Listen to our interview, coming soon. pic.twitter.com/I93bJwikGl
— The Nobel Prize (@NobelPrize) October 11, 2021
The research duo used natural experiments to reverse misconceptions surrounding minimum wage, immigration and education.
Their most significant experiment debunked the commonly held belief that wage increases resulted in job losses by studying what happened after the US state of New Jersey increased wages from $4.25 to $5.05 in comparison to neighbouring Pennsylvania, where wages stayed the same.
But Krueger, who served as a chair of President Obama’s Council of Economic Advisors, took his own life in 2019 and could not receive the award as Nobels aren’t awarded posthumously.
Instead, Angrist and Imbens - who also worked with Krueger - shared the prize for their contribution to “the analysis of causal relationships”.
Angrist and Krueger studied the relationship between education and lifetime earnings, finding that one additional year of education was worth an increase of about 7.5 percent in earnings.
MIT economist Joshua Angrist shares Nobel Prize: Cited for work building the foundations of “natural experiments” in economic research, Angrist is honored along with two others in California. https://t.co/vj0F47jO6m pic.twitter.com/sXTUBwBv6v
— Massachusetts Institute of Technology (MIT) (@MIT) October 11, 2021
Imbens and Angrist then used natural experiments to study the relationship between cause and effect.
Many took to Twitter to congratulate the three winners, as well as Krueger’s contributions.
It's been a busy morning for #NobelPrize winner Guido Imbens and his family! After waking everyone up when they heard the news shortly before 3 a.m., @Susan_Athey told their kids Andrew, Sylvia, and Carleton that they could decide if they wanted to go to school or not today. pic.twitter.com/rJjZZAbKVO
— Stanford University (@Stanford) October 11, 2021
“The Nobel today is a good time to remember and celebrate the economist Alan Krueger,” researcher Max Roser wrote on Twitter.
“Krueger died two years ago. He dedicated his energy and skills to the same research that was awarded with the Nobel today.”
The conversation also turned to the importance of mental health and checking in with those around us.
And they STILL do it, with language that everyone gets! "kungfu represents life as a journey where people have choices to make – everybody has a destiny and yet, they also have a free will. That works well for econometrics – it’s like you already have a destiny, which is y0, ..."
— Dr. Tammy McGavock (@tmcgav) October 11, 2021
“Alan Krueger also taught us something even more important: Deep dark, life-ending depression can and does attack beloved, creative, prolific, widely respected people,” economist Dr Tammy McGavock tweeted.
“No one is immune.
“We must check on each other. We must normalize seeking help.”
The three winners split the 10 million Swedish kroner prize, with Card receiving half and Angrist and Imbens splitting the remainder.
Image: Niklas Elmehed / Nobel Prize Outreach