They "provided us with new insights about the labour market and showed conclusions about cause and effect can be drawn from natural experiments," the Swedish Academy said.
On Monday, the Royal Swedish Academy of Sciences awarded the Nobel prize in economics to David Card "for his empirical contributions to labor economics," and to Joshua Angrist and Guido Imbens "for their methodological contributions to the analysis of causal relationships."
This year's laureates "provided us with new insights about the labour market and showed conclusions about cause and effect can be drawn from natural experiments. Their approach has spread to other fields and revolutionized empirical research," the Academy said.
Using natural experiments, Card has analyzed the labor market effects of minimum wages, immigration and education. His studies from the early 1990s challenged conventional wisdom, leading to new analyses and additional insights. Among other things, the results showed that increasing the minimum wage does not necessarily lead to fewer jobs.
Data from a natural experiment are difficult to interpret. But in the mid-1990s, Angrist and Imbens solved this methodological problem, demonstrating how precise conclusions about cause and effect can be drawn from natural experiments, according to the statement.
"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," said Peter Fredriksson, the chair of the Economic Sciences Prize Committee.
Card, born in 1956 in Guelph, Canada, is the Class of 1950 Professor of Economics at the University of California, Berkeley, USA. Angrist, born in 1960 in Columbus, USA, is the Ford Professor of Economics at the Massachusetts Institute of Technology, Cambridge, USA. Imbens, born in 1963 in Eindhoven, the Netherlands, is the Applied Econometrics Professor and Professor of Economics at the Stanford University, USA.
The prize amount is about US$1.1 million, with one half to Card and the other half jointly to Angrist and Imbens.