Three U.S.-based economists were awarded the Nobel Memorial Prize in Economic Sciences on Monday for their work drawing conclusions by observing the cause and effect of real-world economic actions.
The men will share 10 million Swedish kronor, or more than $1.1 million.
Card was honored for his pioneering work in labor economics. Angrist and Imbens were recognized for their methodological contributions to an understanding of causal relationships, the prize committee said.
The ceremony was live-streamed on the institution’s website.
The committee highlighted Card’s study of the impact of wages on employment. After New Jersey raised its minimum wage in 1992, he analyzed employment patterns along the border with Pennsylvania and concluded that the higher wage had not discouraged hiring.
Card’s work upended the conventional wisdom and led to additional research showing that a firm’s behavior often swamps the impact of wage policy.
Angrist and Imbens developed a framework demonstrating what “precise conclusions” can be drawn from observations, which has been widely adopted by researchers working with observational data, the committee said.
“Card’s studies of core questions for society and Angrist and Imbens’s 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, chair of the Economic Sciences Prize Committee.
Taken together, the three economists have revolutionized empirical work in the social sciences, the committee said.
“I was absolutely thrilled to hear the news,” said Imbens, 58, who noted that the three men are friends and that Angrist had been the best man at his wedding.
The Stanford economist joined the award news conference by telephone.
Card received the news in a phone call from the Nobel committee’s Adam Smith, which he “suspected might be a ‘made-up name, ’” according to a Nobel tweet. In a photo taken by his wife, Cynthia Gessele, Card was shown receiving the news, clad in a bathrobe.
The committee was unable to reach Angrist before the ceremony, according to Eva Mork, a Swedish economist and member of the prize committee.
Card is a U.S. and Canadian citizen, while Angrist has joint Israeli-U.S. citizenship. Imbens is a Dutch and American national.
The men were honored for their work showing what conclusions can be drawn from observations of economic forces when it is not possible to conduct randomized experiments, Mork said.
The committee said it can be hard to analyze questions such as the impact of immigration on employment or the income boost linked to additional years of education. “These questions are difficult to answer because we have nothing to use as a comparison. We do not know what would have happened if there had been less immigration or if that person had not continued studying,” the committee said.
But Card, Angrist and Imbens showed that it is possible to reach important conclusions about the effects of social and economic policies by observing natural experiments, “situations in which chance events or policy changes result in groups of people being treated differently, in a way that resembles clinical trials in medicine,” the committee said.
Monday’s announcement comes amid shifts in economic thought on multiple fronts. The global economy is struggling to escape the delta coronavirus variant, leaving economists puzzling over unusual developments in labor markets, supply chains and product pricing.
In winning the Nobel, Card, Angrist and Imbens join previous winners such as Paul Samuelson of the Massachusetts Institute of Technology, Milton Friedman of the University of Chicago and Joseph Stiglitz of Columbia University.
Last year, two Stanford University economists, Paul Milgrom, a professor of humanities and sciences, and Robert Wilson, an emeritus professor of management at the Stanford Graduate School of Business, were honored for pioneering work in auction theory.
Before Monday’s announcement, a total of 86 laureates had received the prize, known formally as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.