David Card

Education and Early Career

David Card was born to Edward and Yvonne Card and was the eldest of five children. His family were dairy farmers in Ontario and as a teenager he worked for other farmers, as well as at a research farm near his home. (See also Agriculture in Canada.)

Card attended John F. Ross high school, graduating in 1974. After high school, he chose Queens University for his undergraduate degree. Beginning his undergrad with a major in physics, he was introduced to economics while helping a girlfriend with her homework. He began reading her textbook, which was written by then-Queens professor Richard Lipsey. Intrigued, he took a class, and soon abandoned physics for economics, which he reportedly found more practical.

The 1970s in North America were rocked by several large strikes and Card chose these as the subject for his undergraduate honours thesis. Working with other students and using punch card computers, he enjoyed the camaraderie of research and began to consider graduate studies. He excelled and won the Prince of Wales Prize as the top student at the university upon graduating with a BA in 1978.

Card completed his doctorate at Princeton University in 1983, under the supervision of labour economist Orley Ashenfelter. Card’s dissertation, Indexation in Long Term Labor Contracts (1983), offered a model of wage indexation provisions in labour contracts, which are clauses in employee contracts that make workers’ wages rise along with inflation. In his dissertation, Card first presents a theoretical model of how these agreements work, and then provides a system for testing that model in the real world — a way of doing economics that would soon set him apart from his peers.

Card went on to teach economics at the University of Chicago (1982–83) and at Princeton University (1983–97), with occasional visiting positions at Columbia and Harvard, before joining the faculty at the University of California, Berkeley in 1998. From 2008 to 2017, he was director of the Labor Studies Program at the National Bureau of Economic Research, a non-profit research institution based in Cambridge, Massachusetts. He currently serves as the Class of 1950 Professor Emeritus of Economics at Berkeley, where he also acts as director of the Centre for Labour Economics and the Econometric Lab.

Major Contributions

David Card has authored over 130 journal publications and book chapters in his career, but is primarily known for several seminal studies conducted in the 1990s that used empirical data to challenge prevailing economic ideas about immigration, the minimum wage and school quality.

Miami Boatlift Study

While teaching at Princeton University, he began to research the minimum wage, along with fellow economist Alan Kreuger. In a 1990 paper, “The Impact of the Mariel Boatlift on the Miami Labor Market,” Card studied how wages and unemployment rates among unskilled labourers were impacted by a sudden influx of Cuban refugees to Miami, where the newcomers suddenly increased the labour force by 7 per cent. The economic orthodoxy of the time held that such a burst in the supply of labourers would weaken the bargaining power of workers, lowering wages and increasing unemployment. This was expected to be especially true among Black workers, who occupied a similar socio-economic niche as the new Cuban migrants.

Card’s research, however, proved the opposite. Following the entry of new Cuban migrants, unemployment among Black people in Miami declined, whereas it increased in nearby cities not affected by the migration. Miami’s ability to absorb the new migrants into the labour force was a surprise to Card and it shocked the economics world.

Black School Quality Study

From there, Card and Krueger used empirical data to investigate another economic issue in the United States. In 1960, the wage gap between African American men and whites was huge, with white men earning some 40 per cent more than Black men on average. Yet by 1980, that gap had narrowed to 25 per cent, and economists were divided on the cause. Some argued that improvements in Black education were responsible, while others claimed that federal government policies, like the Civil Rights Act of 1964, were the cause.

Card and Kreuger tested the first hypothesis. They gathered data on how many pupils a given teacher had in their classroom, teacher pay rates, and term length for Black and white schools in 18 segregated US states from 1915 to 1966. Then, they compared these school quality data points to data on wages and return to schooling for both Black and white men from those states in 1960, 1970 and 1980. The results show that as school quality for Black men improved, so too did their earnings later in life. In their 1992 paper, School Quality and Black-White Relative Earnings: A Direct Assessment, Card and Krueger concluded that these increases in school quality helped to explain why the earnings gap between Black and white men narrowed by 15-20 per cent between 1960 and 1980.

New Jersey Minimum Wage Study

In a 1994 paper co-authored with Krueger, Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania, Card found that a minimum wage increase in New Jersey did not hinder job growth among fast-food restaurants, as mainstream economics held that it should. Instead, they found that these restaurants had been suffering from chronic turnover and that higher wages actually helped them retain employees. Card and Krueger further expanded their research on the minimum wage with their 1995 book, Myth and Measurement: The New Economics of the Minimum Wage. While highly controversial at the time, their conclusions have since been widely accepted.

Significance — The Credibility Revolution

David Card and Alan Krueger’s studies contributed to what is now known as the “Credibility Revolution” in macroeconomics, a shift from abstract, theoretical study to empirical analysis of what actually happens when a policy is changed. Key to Card and Krueger’s work was finding “natural experiments,” real-world situations that can be used as tests of economic principles. The Miami boatlift case was useful, as it focused on one city that experienced a mass migration, allowing unemployment rates there to be compared against similar cities that did not. Likewise, when New Jersey raised its minimum wage, neighbouring Pennsylvania did not, allowing the two to be compared. Later work by economists Guido W. Imbens and Joshua D. Angrist showed that these kinds of experiments can yield conclusions about cause and effect, cementing Card’s works as major contributions to the field of economics.

Nobel Prize in Economics

David Card was awarded half of the 2021 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (colloquially known as the Nobel Memorial Prize in Economics) for his “empirical contributions to labour economics.” In other words, the prize recognized that his natural experiments could show how economic constructs function in the real world. He shared the prize with Guido Imbens and Joshua Angrist. (See also Nobel Prizes and Canada.)

Personal Life

David Card lives in Santa Rosa, California, with his wife, Cynthia Gessele, who holds a PhD in music history.

Honours and Awards

David Card is the recipient of the 1995 John Bates Clark Medal from the American Economic Association, which is awarded to an economist under the age of 40 who is recognized for making important contributions towards the field. The prize is regarded as a precursor to the Nobel Prize in Economics, which he co-received in 2021. (See also Nobel Prizes and Canada.) Along with Alan Kreuger, Card received the IZA Prize in Labor Economics from the Institute of Labor Economics in Bonn, Germany, in 2006. In 2008, he was awarded the international Econometric Society’s Frisch Medal, considered one of the top three honours in the field of economics. In 2021, he was elected to the National Academy of Sciences. He has also received honorary doctorates of law from his alma mater, Queens University (1999), the University of Guelph (2015), the University of Ottawa (2017), and the Université de Montréal (2019).