Viewpoints
David Card's research proves:
• A rational and modest increase in the minimum wage will not only not increase unemployment, but may reduce it
Accepting more immigrants does not necessarily rob domestic workers of job opportunities or lower their wages
● The level of investment in education significantly affects a student's level of education and the student's future income
Author: Li Chang'an (Professor, National Institute of Opening Up, University of International Business and Economics)
The 2021 Nobel Prize in Economics was announced and shared by three economists in the United States. Half of them were awarded to David Card, a professor at the University of California, Berkeley, in recognition of his "empirical contributions to labor economics." Card has worked in the field of labor economics for many years and has achieved remarkable results. This time Card won the Nobel Prize in Economics, which is also deserved.
For the first time since the Nobel Prize in Economics was first awarded in 1969, it has been clearly stated that the laureate's field of study is labor economics. Due to the intersectionality and ambiguity of the division of disciplines, in fact, many of the winners are involved in the field of labor economics. Labor employment, as an important concept in economics, is covered by most macroeconomists. If labor economics is to be defined narrowly, there are several winners who have contributed to it. For example, Schultz and Becker, pioneers of the theory of human capital, and Fogel, Heckman, and McFadden, who extended the theory to the study of history, proposed new ways to solve the problems of labor economics, and the search theory proposed by Diamond, Mortensen, and Pisarids was also widely used in the field of labor economics. Considering that labor economics is essentially the study of human development issues, it has increasingly become a "prominent science" in economics.
Card has contributed to several areas of study in labor economics, particularly in the areas of minimum wages, income distribution gaps, the impact of foreign immigrants on the labor markets of places of emigration, and employment policies. By conducting empirical research on a series of realities supported by massive data, namely "natural experiments", Card challenges traditional economic concepts in a number of important areas, focusing on the following three aspects.
Theoretical aspects of the minimum wage
The minimum wage system has always been controversial, and some theories believe that raising the minimum wage will lead to an increase in the cost of wages in enterprises and thus reduce employment, which will have a crowding out effect on employment, reduce the demand for the labor market, and instead cause workers to lose their jobs. In his highest-cited paper, "Minimum Wage and Employment," Card found through an in-depth study of the relationship between the two that, unlike the results of the classical model, a reasonable setting and moderate increase in the minimum wage not only does not increase unemployment, but may reduce it. By constructing a model of the multiple difference between wages and employment levels, he came to two conclusions: one is that the minimum wage system not only raises the incomes of low-income groups, but also increases the incomes of workers whose original wages exceed the minimum wage; the other is that the employment situation of most low-income people is not affected. This means that the minimum wage system contributes to the improvement of labor benefits.
Aspects of the impact of immigration on employment and wages
Many believe that the influx of immigrants will have an impact on the employment of local workers and may also cause local wages to fall. But Card's research found that accepting more immigrants doesn't necessarily rob domestic workers of job opportunities or lower their wages. In his article "Migration and Inequality," he argues that although immigration has a large supply shock to the low-skilled labor market, local wage levels have not been significantly affected. At the same time, most immigrants are absorbed by changes within the industry in the city.
In terms of return on investment in human capital
Most economists are aware that investments in human capital, primarily in education, increase workers' incomes. But how to accurately measure this benefit has been debated endlessly. Card's research methods, based on "natural experiments", demonstrate that the level of educational input significantly affects a student's level of education and the student's future income. Not only that, the continuous improvement of the quality of education can also effectively narrow the income gap between different groups of people. Kader's research has not only had a huge impact on academia, but has also influenced the U.S. federal government and parts of Europe to continue to maintain a high degree of support for education investment.
What is the impact and reference for our country?
Kade's research has a strong enlightening significance for the current employment theory research and employment policy formulation in China. At present, with the continuous improvement of the income level of residents, the minimum wage standard in China is also rising. However, what kind of impact the minimum wage standard has on China's labor market, and whether it will affect the employment and wages of workers, has also been the focus of attention of domestic scholars and policy makers. Kader's research tells us that a suitable minimum wage system is not only conducive to protecting the wage level of low-income groups from being too low, but also has a positive effect on the employment and income of on-the-job workers. At the same time, Kader's research shows that floating populations can promote local economic development, create more jobs, and raise the wage level of workers. This point is also of reference significance for a country with large population movements, such as China, and has been proved in practice. In addition, efforts to increase the population's investment in human capital, increase investment in education, and attach great importance to skills training for workers are the keys to enhancing the employability of workers and achieving fuller and higher quality employment.
Take a look
Nobel Prize in Economics
origin
The Nobel Prize in Economics is the only one established not by the will of its founder, Alfred Nobel, but by the Swedish National Bank on the occasion of its 300th anniversary, in honor of the chemist Nobel, and the full name is "The National Bank of Sweden Commemorates the Alfred Nobel Prize in Economics".
Awarded 53 times, a total of 89 people won
The Nobel Prize in Economics, the youngest prize in the Nobel Prize selection, was first awarded in 1969, while other Nobel Prizes have been awarded since 1901.
From 1969 to 2021, the Nobel Prize in Economics has been awarded 53 times, with a total of 89 winners.
It will be distributed to a maximum of 3 people at a time
The Nobel Prize stipulates that it can only be awarded to a maximum of 3 people, and in the past 53 awards:
1 winner awarded 25 times
Awarded to two winners 20 times
8 times awarded to 3 winners
The winner's research area
Since 2010, the research areas of the award-winning economists are:
Econometrics Macroeconomic Econometrics Regulatory Economics Game Theory Microeconomics Corporate Governance Financial Economics Development Economics Behavioral Economics and Macroeconomics...
Age distribution of winners
The average age of the winners is 67 years old
● The oldest
The American economist Leonid Hurwicz, who won the award in 2007, was the oldest winner, at the age of 90.
● Youngest
The youngest winner was Esther Duflo, a French-American economist who won the 2019 award, at the age of 46.
● Female winners
Elinor Ostrom was the first laureate of the Women's Economics Prize in 2009. Esther Duflo won the award in 2019, becoming the second female winner.
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