Africa-Press – Namibia. THREE American economics professors – David Card, Joshua Angrist, and Guido Imbens – have been announced as the recipients of the 2021 Nobel Prize for economic sciences.
Card was recognised for his empirical contributions to labour economics, while Angrist and Imbens were noted for their methodological contributions to the analysis of causal relationships.
According to the awarding organisation, the Royal Swedish Academy of Sciences, the three professors have provided the world with new insights on the labour market, and have shown what conclusions about cause and effect can be drawn from natural experiments.
Their studies address tough questions, such as: How does immigration affect pay and employment levels? How does a longer education affect someone’s future income?
Although the above questions can be answered simply through conventional wisdom, data and evidence have suggested otherwise, the laureates argue. These questions are challenging in the absence of comparison standards.
The professors turned to nature to answer these questions. Using natural experiments, Card has rubbished and challenged widely accepted conventional wisdom. An example of this is the notion that increasing the the minimum wage leads to fewer jobs.
The laureates’ studies have also shown that resources in schools are far more important for students’ future labour market success than was previously thought.
The studies also include explanations on how to determine war veteran packages, for example of the Vietnam war. Although mainly based on the United States’s economy, some lessons can be applied to Namibia.
An interesting observation is that the impact of resources on school achievement and future earnings tends to be greater for disadvantaged students, suggesting their education options are more constrained than those of students from advantaged backgrounds.
The award comes with a N$17,1 million cash prize, with one half going to Card and the other half jointly shared by Angrist and Imbens. One thing is certain, “natural experiments help answer important questions for society”, the Royal Swedish Academy says.
The laureates’ work has also spread to other fields and has revolutionised empirical research. “Card’s studies of core questions for society and Angrist and Imbens’ methodological contributions have shown 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,” says Peter Fredriksson, chair of the economic sciences prize committee.
Namibia Post Limited employees are expected to peacefully demonstrate at the company’s headquarters against insufficient salary increments today. Could the answer to their plight be found in the 2021 laureates’ studies? Read the laureates’ extended notes and full explanation on the Nobel Prize website.
