David Card, A Nobel Prize For A Minimum Wage Scholar

David Card, A Nobel Prize For A Minimum Wage Scholar

The Swedish Academy awards the highest award in economics to this 65-year-old Canadian Ph.D. at Princeton and who teaches at Berkeley, an expert in basic issues of the labor market.

A few days ago, the Spanish Jorge Carrión wrote in The Washington Post that “the Nobel Prize winners continue to show a very marked bias in their identification of excellence” , and he said it in reference to the Prize for Literature, awarded this year to another writer who writes in English and is a British resident despite his Tanzanian origin.

“The criteria with which contributions to universal culture are evaluated and rewarded were born in colonialist Europe, were adopted by academic institutions in the United States and perpetuate logics from other times”, mused Carrión, doctor in Humanities from the Pompeu Fabra University of Barcelona.

This reflection does not detract from the winners; Rather, it seeks to broaden our vision of a multipolar world, as it is now called, in which there is life beyond Old Europe and the United States. That said, this year’s Nobel Prize in Economics celebrates ex aequo three men of Anglo-Saxon culture and trained at American universities: David Card, Joshua Angrist and Guido Imbens.

Although the trajectory of the three would give for several articles, the journey of David Card (Guelph, Canada, 1956) draws attention, who has delved into basic issues of the labor market, such as union bargaining, inequality, the minimum wage , unemployment benefits and welfare programs: everyday issues that are very present in societies like Spain.

One of his best known investigations is the one entitled Do minimum wages reduce employment? A case study of California, 1987-89 (Does employment reduce the minimum wage? California case study, 1987-89). Card starts from a specific event: in July 1988, the minimum wage in California rose from $ 3.35 to $ 4.25.

The author of this academic article adds two pieces of information: during the previous year (1987), 11% of the state’s working population and 50% of Californians teenagers had earned less than the new state minimum wage.

“The general opinion is that the imposition of a mandatory wage floor will reduce the employment of the youngest and the least qualified,” Card began his dissertation, published in the Industrial and Labor Relations Review , in 1992. However, in the conclusion he said This: “I cannot find empirical support for the conventional prediction that economists make about the effect of minimum wages on employment.”

The expert added: “Although the increase in the minimum wage in California raised the income of workers with the lowest wages, it does not appear to have significantly reduced employment, even in the retail industry .”

Mathematical philosophers vs labor economists
David Card received his bachelor of arts from Queen University, Kingston, Ontario, in 1978; and obtained a doctorate from Princeton University in 1983. “He began studying chemistry, physics and mathematics, and he only picked up an economics book – he remembers now – to help his girlfriend of the moment. And he quickly realized that he was not only fascinated, but what he was reading had implications that extended to agriculture, which, as the son of farmers, was a subject of particular importance to him “, they reported in 2015 from the BBVA Foundation, which awarded Card with the award Frontiers of Knowledge.

The new Nobel laureate has spent most of his professional career as a professor of economics at the University of California, Berkeley; He has been co-editor of the Journal of Labor Economics and Econometrica , and has received awards such as the Frisch Medal, in 2007.

“Economics as a whole is really a combination of two types of people: those with a very practical orientation and those who are more like mathematical philosophers. Mathematical philosophers get most of the attention. They deal with the big questions. no answer. Labor economists try to be more scientific: they look for very specific predictions and try to test them as carefully as possible. Mathematical philosophers are very frustrated by labor economists. They come up with a broad general theory, and we tell them that does not fit the evidence, “Card said in 2006, on the website of the Minneapolis Federal Reserve.

Another of his experiments includes a study on how a sharp increase in emigration from Cuba to Miami affected wages and employment after Fidel Castro’s decision in 1980 to allow his compatriots to leave Cuba. According to The Guardian , in four months, 125,000 Cubans arrived in Miami, increasing the size of the working population by 7%, but the comparison with four other US cities “did not find detrimental effects on jobs or wages of underpaid workers. ”

Card says he hasn’t touched on the minimum wage investigation since the 1990s, and that he even lost friends for publishing his findings. In his defense, he insists that he stays away from politics and emphasizes that he never advocated raising the minimum wage: he only said that raising it in small doses would not have much impact on employment.

Leave a Reply

Your email address will not be published. Required fields are marked *