Nobel Prize in economics goes to ‘natural experiments’ pioneers

US economists David Card, Joshua Angrist and Guido Imbens win the 2021 Nobel Prize in economics.

Economists David Card, Joshua Angrist and Guido Imbens have won the 2021 Nobel Prize in economics for pioneering the use of “natural experiments” to understand the causal effects of economic policy and other events.

Natural experiments use real-life situations to work out effects on the world, an approach that has spread to other fields and revolutionised empirical research.

One such experiment by Canada-born economist Card on a minimum wage increase in the US state of New Jersey in the early 1990s prompted researchers to review their view that such increases should always lead to falls in employment.