Gary Becker - Nobel Laureate in Economics

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:55

Gary Stanley Becker is the recipient of the Sveriges Riksbank Prize in Economics in memory of Alfred Nobel. Born December 2, 1930 in Pottsville, Pennsylvania, USA Died May 3, 2014, Chicago, Illinois, USA.

Motivation for the Nobel Prize in Fundamentals of Theory by Gary Becker - "for extending the scope of microeconomic analysis to a wide range of human behavior and interaction, including non-market behavior."

Contribution: Expanded the field of economics into aspects of human behavior previously considered by other social science disciplines such as sociology, demography and criminology.

Work

Gary Becker has applied economic theories and approaches to areas previously considered only in sociology, demography and criminology. His starting point was that authors act rationally to maximize specific goals such as advantage or we alth. In the 50s and 60s he applied his models in several areas:investment in human competence (or human capital), behavior in families, crime and punishment, discrimination in the labor market and other markets.

Childhood and school years

Gary Becker was born in Pottsville, Pennsylvania, a small mining town in Eastern Pennsylvania where his father owned a small business. When he was four or five years old, the family moved to Brooklyn, New York. There he went to elementary and then high school. Until the age of sixteen, he was more interested in sports than in intellectual activities. At that time, he had to choose between playing handball and mathematics. In the end, he chose mathematics, although, by his own admission, he was better at handball.

Princeton

Partly his interest in economics was stimulated by the need to read stock quotes and other financial statements to his blind father. They had many lively discussions at home about politics and justice. Under their influence, the interest of the future Nobel laureate in mathematics began to compete with the desire to do something useful for society. The two converged during his freshman year at Princeton, when Gary Becker happened to take an economics course and was drawn to the mathematical rigor of the subject of social organization.

To achieve financial independence sooner, at the end of his freshman year, he decided to graduate in three years, a rare practice at Princeton. He had to take several additional courses: modern algebra and differential equations. Studying mathematics at Princeton is goodprepared him for use in the economy.

Chicago

Interest in the economy gradually began to fade, as it seemed to Becker that it could not solve important social problems. He considered switching to sociology, but found the subject too difficult. Then Gary Becker decided to enter the University of Chicago. His first encounter in 1951 with Milton Friedman's microeconomics course renewed his fascination with economics. The scientist emphasized that economic theory is not a game of smart academics, but a powerful tool for analyzing the real world. His course was filled with insight into both the structure of economic theory and its application to practical and important issues. This course and subsequent contacts with Friedman had a profound effect on the direction of further research.

Scientific work

There was a group of economists in Chicago who did innovative research. Particularly important to Gary Becker were Gregg Lewis's use of economics to analyze labor markets, T. W. Schultz's pioneering work on human capital, and L. J. Savage's work on subjective probability and the foundations of statistics.

In 1952, Becker published two papers based on his research at Princeton. His doctoral dissertation was published in 1957. It contains the first systematic attempts to use economic theory to analyze the impact of prejudice on the earnings, employment, and occupations of minorities. This made him go down the path of applyingeconomy to social issues.

Gary Becker's work received favorable reviews in several major magazines, but for several years it did not influence anything. Most economists did not consider racial discrimination to be economics, and sociologists and psychologists generally did not believe that he contributed to their fields. However, Friedman, Lewis, Schultz and others in Chicago were convinced that this was an important piece of work.

Teaching and further research

After his third year of graduate school, Gary Becker became an assistant professor in Chicago. He had a small teaching load, which allowed him to focus mainly on research. After three years in that position, he turned down a much higher salary in Chicago to take a similar position in Columbia, combined with an appointment with the National Bureau of Economic Research, then also based in Manhattan.

For twelve years, Gary Becker divided his time between teaching at Columbia and researching at the bureau. His book on human capital was the result of the bureau's first research project. During this period, articles were also written on time management, crimes and punishments, and irrational behavior.

In Colombia, Becker taught a seminar on labor economics and related subjects. Studied human capital with Jacob Mintzer before the subject was properly valued in the profession as a whole. They also worked on time management and other issuesof great importance for research.

In 1970 he returned to Chicago. At this time, George Stigler and Harry Johnson were already working there. With Stigler, he wrote two significant papers: on the stability of tastes and an early treatment of the principal-agent problem. Under Stigler's influence, Becker's interest in political economics was renewed. In 1958, he published a short article on this topic. In the 1980s, Gary Becker published two papers that developed a theoretical model for the role of special interest groups in the political process.

The main theme of his research was the family. While future Nobel Prize winner Gary Becker used economic theory to try to understand birth rates and family size, over time he began to consider the full range of family issues: marriage, divorce, altruism towards other members, parental investment in children, and long-term changes in what families do. A series of articles from the 1970s ended in 1981 with a Treatise on the Family. In 1991, a much expanded edition of it was published. The scientist tried not only to understand the factors that determine divorce, family size and the like, but also the impact of changes in family composition and structure on inequality and economic growth.