Nobel Prize in Economic Sciences breaks myths; sets a new direction for progress

The Nobel Prize in Economics has been awarded one half to David Card and the other half jointly to Joshua D. Angrist and Guido W. Imbens.

Nobel Prize is given to prominent persons in different fields as a year’s recognition of their efforts to advance or progress of the particular field. Sometimes, the Nobel Prize also changes the direction of a particular view or myth. The 2021 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded one half to David Card and the other half jointly to Joshua D. Angrist and Guido W. Imbens.

David Card proved that increasing the minimum wages of the labour will not have a negative impact on the economy. He has broken this myth that was carefully created and fueled by the corporate world.

David Card in his study proved that there is no relationship between the minimum wages and the rate of unemployment. This is particularly important in relation to India since this view was also prevalent that any hike in minimum wages of a worker will negatively impact the rate of employment. The minimum wage in India is still Rs 180.

Through his research conducted in different countries, he has proved that this is a myth. Increasing the minimum wages has a positive effect on the economy since it increases demand. The COVID-19 Coronavirus Pandemic and ensuing lockdown had a devastating effect upon the economy and no country including India could remain unaffected. There was a steep fall in the demand after the pandemic.

The government of India must also give a thought to David Card’s research and think about revising the minimum wages of the workers. This year’s Nobel Prize has been shared with Joshua Angrist of the Massachusetts Institute of Technology and Guido Imbens of Stanford University. The duo has been given the Nobel Prize for finding a clear link between education and income.

Joshua Angrist and Guido Imbens proved with their research that a person who has obtained education for 11 years earns 12% less than a person who has obtained education for 12 years and 65% less than a person who has obtained education for 16 years.

Kerala as a state has a very high literacy rate and this can be gauged by the fact that it prioritizes education and welfare. The Indian states that have set aside a major chunk of their revenues for education and welfare have been able to raise the standard of living for their population. Education and income are indeed directly related to one another.

Feature Image: NoblePrize/Twitter

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