issuing time:
The Royal Swedish Academy of Sciences announced on October 11 that the 2021 Nobel Prize in Economics was awarded to David Card of the University of California, Berkeley, and Joshua D. Anger of the Massachusetts Institute of Technology (MIT) Rist (Joshua D. Angrist), Stanford University’s Guido W. Imbens (Guido W. Imbens). The reason for the award is that they have developed data analysis methods and clarified the impact of raising the minimum wage.
Why did these three Americans win the Nobel Prize in Economics? According to the Nihon Keizai Shimbun, economics studies lively social issues, and it is impossible to conduct repeated experiments like natural sciences. Therefore, David Card and others have adopted a method that is more similar to the trends of social groups.
The representative field is labor economics, and David Card is famous for his research on minimum wages. In his paper published in the 1990s, he collected data on changes in fast-food restaurant employment for states that raised the minimum wage during the same period and those that kept the minimum wage unchanged. According to the economic theory of the time, if the minimum wage was raised, the operators would reduce their employment because they hated the increase in costs. David Card and others compared the data of stores in the same format in the two states and found that employment has not decreased. Hokkaido University professor Yuki Abe pointed out that “(David Card) is well-known for confirming that immigration inflows will not affect low-income workers, and has developed empirical research on labor economics in a wide range of fields.”
According to the report, research that uses the power of data to subvert traditional theories will bring great changes to economics in the future. Educational effect analysis is also an example. Joshua D. Angrist tried to figure out whether the longer the education, the more a person’s lifetime income. He started his research from school age. Take Japan as an example. According to the entry time of elementary school, the difference in education time between children born in April and children born in March until graduation is about one year. Joshua D. Angrist used this difference to collect data on children and came to the conclusion: the longer the education, the more income after graduation. Guido W. Inbens developed this statistical method called “natural experiment”.
Nihon Keizai Shimbun stated that natural experiments were developed as a method of analyzing the causes and effects of economic phenomena and have been applied to evidence-based policy making (EBPM). Makiko Nakamura, a professor at Keio University in Japan, pointed out the impact of academic development on policy, stating that “the accumulation of research on natural experiments became the driving force behind the Obama administration in the United States to promote evidence-based policy development (EBPM).”
.