For the first time in history, five individuals affiliated with the University have been honored with the Nobel Prize in a single year, as graduate alumni David Card GS ’83 and Joshua D. Angrist GS ’89 shared the 2021 Nobel Memorial Prize in Economic Sciences.
The Royal Swedish Academy of the Sciences awarded one half of the honor to Card “for his empirical contributions to labor economics” and split the other half of the distinction between Angrist and Guido Imbens “for their methodological contributions to the analysis of causal relationships.”
The prize was announced by Secretary General of the Royal Swedish Academy of Sciences Göran K. Hansson, in Stockholm, Sweden, on Monday morning.
Half of the prize money of 10 million Swedish kroner, or approximately $1.14 million, will be awarded to Card, while Angrist and Imbens will each receive a quarter.
Card and Angrist join three fellow 2021 Nobel laureates affiliated with the University: senior meteorologist Syukuro Manabe, professor David MacMillan, and Maria Ressa ’86, who won this year’s prizes in Physics, Chemistry, and Peace, respectively. This is the largest number of Nobel prizes that Princeton faculty or alumni have received in a year in the University’s history.
Both Card and Angrist received doctorates in economics from the University. Card completed his doctoral dissertation in 1982, titled “Indexation in long term labor contracts: a theoretical and empirical analysis,” under the supervision of economics professor Orley Ashenfelter, the Joseph Douglas Green 1895 Professor of Economics.
Angrist was also supervised by Ashenfelter, and completed his dissertation in 1989, titling it “Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records.”
The three laureates are leaders in what has been named the “credibility revolution” in economics research, in which economists increasingly embraced the use of empirical evidence and experiments in their studies. This set them apart from earlier generations of economists who favored developing mathematical models and theory and gradually improving their accuracy.
A fourth individual prominently featured in the relevant research is Alan B. Krueger, a former Chair of the White House Council of Economic Advisers and James Madison Professor of Political Economy at the University, who died at age 58 in 2019.
A close collaborator of Card and Angrist, Krueger also helped shape the development of empirical methods in economics research. Nobel Prizes are not awarded posthumously, and many economists, including Card, agreed that Krueger would almost certainly have shared the prize if he is still alive.
Krueger and Card’s groundbreaking work centered on the minimum wage, immigration, and education. Most notably, they used empirical data to show that increasing the minimum wage may not lead to fewer jobs. In the early 1990s, they received widespread attention for work which scrutinized the effects of minimum wage increases on hiring at fast food restaurants.
The pair compared New Jersey’s comparably high mandated pay to the comparably low mandated pay of neighboring Pennsylvania, ultimately concluding that the Garden State’s policies did not influence fast food employment. Their findings spawned extensive academic research on the employment effects of minimum wages and competitiveness in the labor market. The paper is still taught today in a number of University economics courses, including ECO 100: Introduction to Microeconomics.
Jessica Brown GS ’19, an assistant professor of economics at the University of South Carolina, was a graduate student under Krueger’s supervision who graduated shortly after Krueger’s death. She expressed her simultaneous feeling of joy over the prize as well as loss over Krueger.
“[When the prize was announced], I immediately thought of Alan,” Brown told The Daily Princetonian in a phone call. “It’s definitely bittersweet because this is my field of economics so it’s exciting to have a Nobel [Prize] in our field, but it’s also really sad that Alan couldn’t be here for that; I know he obviously would’ve been just thrilled.”
Angrist worked with Imbens in conducting extensive research on causal relationships.
“Card’s studies of core questions for society and Angrist and Imbens’ methodological contributions have shown that natural experiments are a rich source of knowledge,” Peter Fredriksson, chair of the Economic Sciences Prize Committee, said in a statement on Monday morning. “Their research has substantially improved our ability to answer key causal questions, which has been of great benefit to society.”
Card was born in Guelph, Ontario, in 1956, and studied as an undergraduate student at Queen's University at Kingston, where he received a B.A. in 1978. He then entered the University as a graduate student and received his Ph.D. in economics under Ashenfelter in 1983.
Card taught at the University of Chicago, then joined the University in 1983 and remained until 1997. He then joined the faculty of the University of California, Berkeley, where he still teaches today as the Class of 1950 Professor of Economics.
Card is the Director of the Labor Studies Program at the National Bureau of Economic Research (NBER). His research interests span much of labor economics, including welfare programs, immigration, and wages.
He is also President of the American Economic Association (AEA), a member of the U.S. National Academy of Sciences, and a member of the American Academy of Arts and Sciences. Card’s honors include the 1995 John Bates Clark Medal, an annual honor of the AEA that recognizes the most accomplished American economist under the age of 40.
Angrist is the Ford International Professor of Economics at the Massachusetts Institute of Technology (MIT) and a research associate at the NBER. A labor economist like Card, Angrist conducts research on immigration, social programs, and education reform.
A dual citizen of the United States and Israel, Angrist was born in Columbus, Ohio in 1960. He grew up in Pittsburgh, Pennsylvania, and graduated with a B.A. in economics from Oberlin College in 1982. After serving as a paratrooper in the Israeli Defense Forces, Angrist entered the University as a graduate student and received his Ph.D. in economics under Ashenfelter in 1989.
After earning his doctoral degree, Angrist taught at Harvard University and the Hebrew University of Jerusalem before joining the MIT faculty in 1996. He is a member of the American Academy of Arts and Sciences.
Formally the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the prize was established in 1968 and first awarded in 1969. Though not included in Alfred Nobel’s 1895 will alongside the five original prize categories, the prize in economic sciences is similar in its selection and administration, and is commonly referred to as the Nobel Memorial Prize in Economic Sciences.
This story was last updated at 5:42 p.m. on Monday.
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