Nobel Prize for Economics 2021

United States-based economists David Card, Joshua Angrist and Guido Imbens were awarded the 2021 Nobel Prize in economics for their pioneering the use of “natural experiments” to understand the causal effects of economic policy and other events.

  • David Card took half the prize “for his empirical contributions to labour economics”.
  • Angrist and Imbens shared the other half “for their methodological contributions to the analysis of causal relationships”.

The Nobel Prize for economics this year recognizes pivotal research that upended long-standing beliefs about the effects of minimum wage increases and influxes of immigrant workers.

(Image Source: Daily Mail)

What are Natural Experiments?

Natural experiments use real-life situations to work out effects on the world, an approach that has spread to other fields and revolutionised empirical research.

Some Findings of their Studies

  • An increase in the minimum wage had no effect on the number of employees.
  • An influx of immigrants into a city doesn't cost native workers jobs or lower their earnings, though earlier immigrants can be negatively affected.
  • Increased immigration can have a positive impact on income for people born in the country.

About the Prize

  • The prize, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
  • Laureates in the Memorial Prize in Economics are selected by the Royal Swedish Academy of Sciences.
  • It was first awarded in 1969 to Dutch economist Jan Tinbergen and Norwegian economist Ragnar Frisch.

Indian to win Nobel Prize in Economics

  • Amartya Sen: In 1998, Amartya Sen became first Indian to win the Nobel "For his contributions to welfare economics".

India-born Person to win Nobel Prize in Economics

  • Abhijit Banerjee: In 2019, Abhijit Banerjee (United States) won the Economics Nobel "For their experimental approach to alleviating global poverty".