A labour market knowledgeable whose work influenced the introduction of the UK’s minimal wage has been named as a joint winner of the Nobel economics prize.
David Card, a Canadian-born economist, was one in all three US-based lecturers given the distinguished award for his or her work on whether or not financial principle is supported by real-life conditions.
The trio – Card, Joshua Angrist, an American, and Guido Imbens, from the Netherlands – have been cited for his or her work on pure experiments, which is alleged to have revolutionised empirical analysis.
Card, who acquired half the 10m Swedish kronor (£838,000) prize fund, made his title with a paper that studied whether or not a rise in New Jersey’s minimal wage from $4.25 to $5.25 an hour in 1992 value jobs within the fast-food business.
Opposite to earlier analysis, Card and his fellow economist Alan Krueger discovered that employment in New Jersey eating places elevated after the minimal wage was raised.
The broadly cited paper was seized on by Gordon Brown and his then economics adviser Ed Balls to justify their plans for a UK nationwide minimal wage, which was launched in 1999. Though there’s now cross-party help for the minimal wage, it was initially opposed by the Conservatives on the grounds that it could value jobs.
Krueger, who labored in Barack Obama’s authorities, died in 2019 earlier than his work could possibly be honoured.
Card’s different work has included a examine of how a pointy improve in migration from Cuba to Miami affected wages and employment after Fidel Castro’s determination in 1980 to permit folks to depart Cuba.
In a four-month interval, 125,000 Cubans arrived in Miami, elevating the dimensions of the workforce by 7%, however a comparability with 4 different US cities discovered no deleterious results on jobs or wages of low-paid staff.
Angrist and Imbens, who shared the opposite half of the Sveriges Riksbank Prize in Financial Sciences in Reminiscence of Alfred Nobel, received reward for his or her work on the connection between schooling and revenue, such because the affect on revenue of an additional yr at school.
One of many panel liable for making the award, Eva Mörk of Uppsala College, mentioned: “Many essential questions are about trigger and impact. Will folks change into more healthy if their revenue will increase; do lockdowns scale back the unfold of infections? This yr’s laureates have proven that it’s nonetheless doable to reply these broad questions on trigger and results and the best way to try this is to make use of pure experiments.”
Prizes for peace, literature and science have been awarded since 1901 on account of a fund created by the need of the inventor of dynamite, Alfred Nobel. The prize for economists was made doable by a donation from Sweden’s central financial institution and first awarded in 1969.