A Canadian economist based in the U.S. won the Nobel prize for economics Monday for pioneering research that transformed widely held ideas about the labour force, showing how an increase in the minimum wage doesn't hinder hiring and immigrants do not lower pay for native-born workers. Two others shared the award for developing ways to study these types of societal issues.
Canadian-born David Card of the University of California, Berkeley, was awarded half of the prize for his research on how the minimum wage, immigration and education affect the labour market.
The other half was shared by Joshua Angrist of the Massachusetts Institute of Technology and Dutch-born Guido Imbens of Stanford University for their framework for studying issues that can't rely on traditional scientific methods.
Together, they helped rapidly expand the use of "natural experiments," or studies based on observing real-world data. Such research made economics more applicable to everyday life, provided policymakers with actual evidence on the outcomes of policies, and in time spawned a more popular approach to economics.
In a study published in 1993, Card looked at what happened to jobs at Burger King, KFC, Wendy's and Roy Rogers when New Jersey raised its minimum wage from $4.25 to $5.05, using restaurants in bordering eastern Pennsylvania as the control -- or comparison -- group. Contrary to previous studies, he and his late research partner Alan Krueger found that an increase in the minimum wage had no effect on the number of employees.
