Economic Research, Education, and Institution Building: Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2021

Earlier this week, The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2021 was awarded to David Card (University of California, Berkeley) and to Joshua Angrist (MIT) and Guido Imbens (Stanford University). In this blog post, our Director, Professor Parama Chaudhury discusses their contributions to the frontiers of economic research, education, and institution building.

In a sense, this prize was long overdue, one that no economist will be surprised and few will find very controversial. That may be my bias as a labour economist speaking, as my decision to become an empirical (labour) economist was largely driven by both the early work of and one-on-one conversations with David Card. Card is probably best known for his Mariel boatlift paper which shows that a large influx of migrants didn’t depress natives’ wages, and for his work with Alan Krueger (who would have surely shared this prize had he not died two years ago) on how a minimum wage rise does not necessarily lead to higher unemployment. These and other elements of his work both addressed key policy issues and as Paul Krugman, a previous laureate, explains in this thread, broke new ground in empirical methods igniting what is known as the “credibility revolution.”

Much has been and will be written on the research of Card, Angrist, and Imbens, but especially for those outside the profession, much less will be known about their contributions to education and institution building. Angrist, for example, is known among labour economists for his pathbreaking work using Maimonides’ rule to establish causality (effects of small classes on students’ grades) among many other firsts, but for those of us in economics education, he is probably just as well known for two books for students interested in causal inference, Mostly Harmless Econometrics and Mastering Metrics (both written with Jorn-Steffen Pischke of the LSE). These books use intuitive language (and a bit of kung fu themed humour!) to explain how causality can be established in different situations and with different kinds of data. Without establishing whether a relationship is causal, we obviously can’t tell whether a policy will have the desired effect or indeed whether more migration depresses wages, so the importance of engaging the interested public in this conversation is clear. For more visual learners, Angrist partnered with economics education powerhouse Marginal Revolution University to develop and deliver an online video-based course (with plenty more kung fu from “Master Joshway”). Finally, we at CTaLE were honoured when Angrist accepted our invitation to a panel on Econometrics Education at TeachECONference2021 where he and Pischke discussed their Example First teaching approach.  At a time when the (false?) research vs education dichotomy is alive and kicking, these contributions show the importance of both and that if Nobel Laureates can treat education as such an important area of activity, so can we all!

My meetings with David Card happened when I was a PhD student at NYU and he was visiting Princeton’s Industrial Relations (IR) section. I had heard from older students about his legendary kindness and generosity to students and gathered up the courage to email him for a chat. Not only did he reply, but he also met with me several times, encouraged me to attend seminars in the IR section, and maintained correspondence after he returned to Berkeley. That experience was not unique as two of his former students, Kristin Butcher and Phillip Levine explain in this article (the first section goes into more detail on Card’s research contributions). Having one high-profile professor like this is hugely important of course, but as this thread from Arthur Netto indicates, Card was part of a much larger institution-building (and maintaining!) exercise at Princeton. While the Nobel Prize citation only refers to the research, I am personally over the moon that this kind of attention to developing and supporting a body of work and the researchers and educators of the future has been recognized as a result of the prize (and that I was able to dip into the rich resources of the IR section when it was still at Firestone Library!).

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