In 2023, the international situation is complex and the driving force for economic growth is clearly insufficient. At the same time, the restructuring of global supply chains and the rise of protectionist forces have put structural adjustment pressure on the economies of various countries.
How can the world economy recover in the face of unprecedented changes in a century? How does China's economy develop with high quality? In order to find the answer, the cover journalist interviewed several Nobel laureates in economics.
In this exclusive conversation with David Card, listen to his latest analysis on employment issues.
2021 Nobel laureate in economics, David Kader. Respondents provide pictures.
Winner of the 2021 Nobel Prize in Economics
David Card, born in 1956, holds dual citizenship in Canada and the United States. Professor at the University of California, Berkeley, Director of the Center for Labor Economics and the Laboratory of Econometrics, and a member of the National Academy of Sciences. In 1995, he won the John Bates Clark Award. (Note: This award is presented by the American Economic Association to outstanding economists under the age of 40 and is considered the most famous economics award besides the Nobel Prize in Economics.)
In 2021, half of the Nobel Prize in Economics was awarded to David Card, while the other half was awarded to Massachusetts Institute of Technology professor Joshua Angrist and Stanford University professor Guido Imbens. Among them, David was awarded for his "empirical contribution to labor economics", while Joshua and Gideon were awarded for their "methodological contribution to causal analysis".
The Nobel Prize in Economics jury pointed out that "many major questions in social science involve causal relationships. Some of these questions can be answered through natural experiments. In natural experiments, accidental events or policy changes can lead to a group of people being treated differently. David Kadley used natural experiments to analyze the impact of minimum wage, immigration, and education on the labor market
In research, it is normal to subvert tradition
As a representative figure in the field of labor economics, David Card's research has covered many important topics in labor economics, from the minimum wage to changes in wage structure, from strikes to collective bargaining, from immigration to education, and so on.
David told the cover journalist that although these themes are not very similar, they are related to people's ways of making a living. I am interested in how people raise their families and make choices, and my research also attempts to explore why some people succeed in certain areas while others perform quite poorly
By conducting empirical research on a series of real-life situations supported by massive data, namely "natural experiments," David challenged multiple traditional economic concepts.
Among them, his viewpoint around the "minimum wage system" overturned the traditional "classical model".
Traditional theory believes that raising the minimum wage will lead to an increase in labor costs for enterprises, thereby reducing employment, creating a crowding out effect on employment, reducing labor market demand, and ultimately leading to unemployment among workers.
David and Alan Krueger compared the minimum wage between New Jersey and Pennsylvania in the United States and concluded that a reasonable setting and moderate increase in the minimum wage would not increase the unemployment rate, but could actually lower it, which is completely different from the "classical model".
In addition, David also proposed a disruptive view in his research on immigration, which is that more immigrants do not necessarily take away job opportunities for domestic workers, nor do they lower their wages.
These views have garnered unprecedented attention, but they have also attracted many critical voices.
I don't care about their criticism, nor do I mind the media describing me as a 'challenger'. In research, it's normal to subvert tradition. I usually try to figure out what's hidden behind the problem, which is why I do research, "he said.
The labor market situation always fluctuates with the economic cycle
In response to the high unemployment rate among young people in some countries, David believes that the situation of the labor market always fluctuates with the economic cycle. If there is an economic recession, the probability of young people obtaining jobs will decrease accordingly.
Although some studies have shown that as more and more young people enter the job market, the speed of innovation and productivity growth in society as a whole will be faster. However, once the economy is no longer booming, employers no longer want to hire new employees. If they need to hire, there are multiple options. In this situation, inexperienced and newly graduated young people are clearly not their first choice, "David said.
David believes that this will lead to a problem where young employees find it difficult to start their career. A large number of studies have shown that when young graduates face a sluggish job market, their entire career may be very difficult.
How to solve the problem of difficult employment for young people? David suggests providing special subsidies and tax incentives to employers who hire young people, and creating projects that allow young people to return to campus.
He added, "Most of these measures have certain effects, but their impact is relatively small. If a country has a very serious employment problem, they may solve 10% of the problem, but not 90% of the problem. The key is to improve the overall economic situation so that employers can be optimistic, expand the company, and hire young people
For me, winning the Nobel Prize is not a big deal
When it comes to winning the Nobel Prize in Economics, David admitted that he had not anticipated this outcome at all. The research I did at the time was not very prestigious, and it was surprising to receive this honor. I treated economics as an empirical discipline, trying to study what data revealed. This is different from previous award-winning economists who often focused on theoretical models
Winning an award has indeed had some impact on my life, such as the school providing me with a better exclusive parking space. Sometimes I am invited to give speeches by local clubs, but this honor is not a big deal for me. "David said that as a person about to retire, receiving this honor in the later stages of my career will not affect the way I view the world and life. If I had received the Nobel Prize when I was young, the situation might have been different
David believes that his greatest achievement in life was not winning the Nobel Prize in Economics or any influential paper, but guiding 125 doctoral students. I am still friends with many of them and have been in constant contact with them, which is the most proud thing for me
When it comes to future plans, David told reporters that he is still interested in many topics, such as immigration and company roles.
I think there may be a misconception that economists fully understand the workings of the labor market. However, in reality, there are still many mysteries about the labor market, and I want to continue to be an explorer