Learning Economics: Joshua Angrist's Nobel-Prize Winning Research

By Melissa Eppihimer

Angrist with his Nobel medal.© Nobel Prize Outreach.Photo: Risdon Photography

ECONOMIC RESEARCH HAS SHOWN THAT STUDENTS WHO DROP OUT OF SCHOOL will typically earn less income than those who complete the required years of study. Oddly enough, one of the coauthors behind this research figured out a way to skip his senior year of high school. When Joshua Angrist realized he needed just a few courses to graduate from Taylor Allderdice High School, he left after 11th grade.

“Ironically, I was a terrible student,” said Angrist, who grew up in Squirrel Hill North, near the border with Shadyside. He attended Linden and Wightman Schools and graduated from Allderdice in 1977. Recalling his high school years, Angrist remembers most exploring Frick Park or visiting Rhoda’s Deli on Murray Avenue. Of his time at the lunch spot, he said, “we called Mr. Fisher, the principal of Allderdice, ‘The Hook’ because he would catch us there and drag us back.”

Angrist is now a Nobel Prize winner in Economics and a professor at MIT. After high school, he worked for a while before enrolling at Oberlin College in Ohio, where he developed an interest in economics. Angrist then spent time in Israel, including as a member of the Israeli Defense Forces, before earning his PhD from Princeton University in 1989. In the years since, he has pioneered the analysis of natural economic experiments.

This means Angrist uses real-world data to understand the effects of specific policy choices, like permitting children to leave school when they turn 16 or 17. Because a class cohort is made up of students with birthdays randomly distributed throughout the year, some students will age out and be able to leave school before others. Because of this, it is possible to study how additional schooling affects earning outcomes, as Angrist and his colleague Alan Krueger did. Angrist has also investigated the impact of mandatory military service on income, class sizes on student learning, and school admissions practices (like exams and lotteries) on closing the “achievement gap.”

Angrist’s Nobel diploma. Artist: Stanislaw Zoladz Calligrapher: Marie A.Györi Book binder: Leonard Gustafssons Bokbinderi AB Photoreproduction: Lovisa Engblom Copyright © The Nobel Foundation 2021.

Despite his own “exception-that-proves-the-rule” experience as a young student, education is central to Angrist’s professional life. He teaches economics to students at MIT, where he leads Blueprint Labs, a research group that investigates interventions in education as well as health care and workforce systems.He also co-founded Avela, a company that helps schools run equitable and effective enrollment processes.

The direct impact that Angrist’s economic research has had is one of the reasons he was awarded the Nobel Prize for Economics in 2021. Whether recognized for the sciences, literature, or peacekeeping, Nobel Prize laureates have all “conferred the greatest benefit to Humankind,” as ordered by Alfred Nobel, who established the awards upon his death in 1896.

If winning the Nobel Prize is any indication, Angrist has made the most of the extra year he salvaged from high school. Yet he insists that students contemplating their future should not use his experience—or that of some notoriously successful tech moguls—as a model. “People from educated families can be insulated from the adverse effects of poor choices,” he said, but not all teenagers have the good fortune of growing up,like he did, in a household surrounded by books and learning. (Angrist’s parents, Sarah and Stanley, were both on the faculty at Carnegie Mellon University and still live in Squirrel Hill.)

Angrist also warned that “educated parents worry a lot about where their kids are going to go to college.I think that’s overrated; it matters much less than you might think.” Instead, his research suggests that we’d be better off learning how choices made by school administrators or governments shape our schools and universities. Then, we’ll understand how education matters overall and why for some people it sometimes matters more.

Another Nobel From Allderdice

Frances Arnold, Nobel Prize winner in Chemistry and Allderdice graduate. © Nobel Media AB. Photo: A. Mahmoud.

Allderdice High School can boast of not just one, but two Nobel Prize winners among its alumni. In 2018, Frances Arnold (‘74) received the Nobel Prize in Chemistry for her work on “the directed evolution of enzymes.” Her research has applications in biofuels, pharmaceuticals, and agriculture. Now a professor at the California Institute of Technology (CalTech), Arnold returned to Pittsburgh this past May to accept an honorary degree from Carnegie Mellon University.

Allderdice students have succeeded in many different areas: arts, government, journalism,and other realms that don’t get the recognition they deserve. Yet, two Nobel Prize winners from one school is still noteworthy. As Allderdice’s current principal, Dr. James McCoy, observed,“For our students, knowing that Josh and Frances walked the same halls that they do allows them to imagine success and magnificent levels of achievement for themselves that may have otherwise been unimaginable.” Perhaps a future Nobel Prize recipient will walk those halls when classes return this fall.