Three US-based economists share this year’s Nobel Prize in Economics. One half is given to the David card, while the other was divided between Joshua D. Angrist and Guido W. Imbanes. The three prize winners “completely replaced empirical work in economic science”, said the prize committee, which sought to highlight the knowledge-yielding value of “natural experiments”. His research work revealed hidden aspects of the labor market and helped to identify what conclusions could be drawn on cause-and-effect relationships from ‘experiments’ that are not researcher-staged but still provide comparative data. which allows testing of certain hypotheses.
Card analyzed the effects of minimum wage, immigration and education on the US labor market. For example, his research has shown that raising the wage floor does not necessarily create fewer jobs, as was believed by many. Meanwhile, Angrist and Imbans created a scientific framework to capture causality. His work gave a huge leap to empirical data interpretation and answered many puzzles. Being more general, this part may also be more relevant to us. After all, India’s labor market is a pole different from that of the US.
Don’t miss a story! Stay connected and informed with Mint.
download
Our App Now!!
.