How the Marielitos catapulted David Card to the 2021 Nobel Prize in Economics

The news slipped through the entertainment and the exaltations that the appointment of a Nobel Prize entails, but the Cuban issue appeared this year in the selection of the Royal Academy of Sciences of Sweden to determine the winners of the award in the economic branch .

On October 11, the Nobel Prize in Economics was awarded, in a shared way, to the Canadian David Card, and the duo made up of the Israeli-American Joshua David Angrist and Guido Imbens, of Dutch origin. The three considered luminaries specialists in labor economics.

In the case of Card, a professor at the University of California at Berkeley, he is a pioneer in the use of an original methodology of natural experiments to investigate the effects of immigration and the minimum wage on the labor market. But many are unaware that what catapulted his fame, consolidated his scientific findings and positioned him as one of the prominent economists in the international arena was a study conducted on the Mariel exodus in 1980.

The history of his interest in the “marielitos” phenomenon dates back to 1983, when Card obtained a Ph.D. in economics at Princeton under the tutelage of Professor Orley Ashenfelter, one of the leading economists who ventured to encourage the use of empirical methods. to explore labor markets. Professor Ashenfelter encouraged his new graduate student to investigate whether training programs for disadvantaged workers or unemployed people were really effective.

Card ended up organizing the study as a scientific experiment, applying what he defined as “more sophisticated econometric statistical methods” to analyze the data obtained. The investigation obtained surprising results in the eyes of the United States Department of Labor, which made it possible to finance it to undertake other projects of social interest.

The bases of experimentation were established so that in 1990 Card saw the opportunity to carry out a broader investigation that encompassed the relationship between jobs, wages and immigration. The integration of the Marielito workforce in the Miami area, which assimilated more than half of the 125,000 Cubans who arrived during the 1980 exodus, was the perfect laboratory to test their unconventional theories.

Card realized that he was looking at a unique natural experiment that economists rarely set out to investigate. The focus of his study was to investigate the effect of the wave of immigrants on the employment opportunities of local Miami workers, since the Marielitos increased their workforce by n 7% in the least qualified occupations and industries.

The economist dissected how Miami managed to absorb the flood of Cuban immigrants and compared local economic indicators with those of other American cities. The results of the investigation caused a real stir as they desecrated unshakable myths about the impact of immigrants on unemployment rates and wages.

After studying the data from multiple statistical angles, Card demonstrated, contrary to the convictions of several of his colleagues, that the newly arrived Cubans had no effect on either the wages or unemployment rates of non-Cuban workers in Miami. , and achieved “rapid absorption” into the community workforce.

The revelation about the Mariel phenomenon in Miami shattered classical economic theory and Card was then caught in a crossfire of criticism. But the study on Mariel was for years the most cited in economic matters in the United States and international forums, and it still continues to unleash controversy among its opponents, who claim that the Canadian economist misinterpreted the data.

But the patterns of analysis of the “Mariel case” undoubtedly revolutionized later approaches to the relationship between immigration, employment opportunities, and job qualification.

In 1995 he received the John Bates Clark Medal, awarded to “that American economist under 40 who has made the most significant contribution to economic thought and knowledge,” in reference to his research on the Mariel exodus in Miami.

The Nobel Prize committee recognized Card “for his empirical contributions to the economics of labor”, and justified his appointment with the following arguments:

“Using natural experiments, David Card has analyzed the effects on the labor market of minimum wages, immigration and education. His studies in the early 1990s challenged conventional wisdom, leading to new analysis and additional insights. The results showed, among other things, that raising the minimum wage does not necessarily lead to fewer jobs. We now know that the income of people who were born in a country can benefit from new immigration, while people who immigrated in an earlier era are at risk of being negatively affected. We have also realized that school resources are much more important to students’ future success in the job market than previously thought. ”

The contribution of the Marielitos to American society is out of the question, as is their contribution to the support of the Cuban family on the island. But what Fidel Castro could never glimpse when he made the resounding affirmation that “We don’t want them, we don’t need them” is that 41 years after the forced stampede they would be recognized as an unusual force for renewal in the US labor economy. nothing less than the appointment of a Nobel Prize in Economics.

A Cuban connection that has more than enough reasons to establish itself in the national approval, although it is still difficult to get out of astonishment.

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How the Marielitos catapulted David Card to the 2021 Nobel Prize in Economics

Hank Gilbert