|Born||April 30, 1902|
Arlington, South Dakota, United States
|Died||26 February 1998 95) (aged|
Evanston, Illinois, United States
|Chicago school of economics|
|Awards||Nobel Memorial Prize in Economic Sciences (1979)|
|Information at IDEAS / RePEc|
|Part of a series on the|
| Chicago school|
Theodore William Schultz ( // ; 30 April 1902 – 26 February 1998) was an American economist and chairman of the University of Chicago Department of Economics. Schultz rose to national prominence after winning the 1979 Nobel Memorial Prize in Economic Sciences.
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, is an award for outstanding contributions to the field of economics, and generally regarded as the most prestigious award for that field. The award's official name is The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
Theodore William Schultz was born on April 30, 1902 ten miles northwest of Badger, South Dakota on a 560-acre farm. When Schultz was in the eighth grade, his father Henry decided to pull him out of school. His father's view was that if his eldest son continued to get an education he would be less inclined to continue working on the farm. Schultz subsequently did not have any formal post-secondary education. He eventually enrolled in the Agriculture College at South Dakota State, in a three-year program that met for four months a year during the winter. Schultz moved on to a bachelor's program later, earning his degree in 1928 in agriculture and economics. He also received an honorary doctorate of science degree from the College in 1959. He graduated in 1927, then entered the University of Wisconsin–Madison earning his doctorate in Agricultural Economics in 1930 under Benjamin H. Hibbard with a thesis, titled The Tariff in Relation to the Coarse-Feed Grains and a Development of Some of the Theoretical Aspects of Tariff Price Research.
Badger is a small town in Kingsbury County, South Dakota, United States. The population was 107 at the 2010 census.
South Dakota State University is a public research university in Brookings, South Dakota, United States. Founded in 1881, it is the state's largest and most comprehensive university and is the oldest continually-operating university in South Dakota. The university is governed by the South Dakota Board of Regents, which governs the state's six public universities and two special schools.
The University of Wisconsin–Madison is a public research university in Madison, Wisconsin. Founded when Wisconsin achieved statehood in 1848, UW–Madison is the official state university of Wisconsin, and the flagship campus of the University of Wisconsin System. It was the first public university established in Wisconsin and remains the oldest and largest public university in the state. It became a land-grant institution in 1866. The 933-acre (378 ha) main campus, located on the shores of Lake Mendota, includes four National Historic Landmarks. The University also owns and operates a historic 1,200-acre (486 ha) arboretum established in 1932, located 4 miles (6.4 km) south of the main campus.
Schultz married Esther Florence Werth (1905–1991) in 1930. She was born and raised on a farm near Frankfort, South Dakota of German parents, who encouraged her to pursue schooling. Werth was the first in her family to attend college, receiving a bachelor's degree in commercial science from South Dakota State College in Brookings in 1927,and subsequently worked as a school teacher in Waubay from 1927 to 1929 and then in Gregory from 1929 to 1930. Werth shared Schultz's background in agriculture and commitment to ideals of education and economic development, and throughout his career worked as a primary editor of his published works. In his Nobel Prize Lecture he acknowledged her contributions thus: "I am also indebted to my wife, Esther Schultz, for her insistence that what I thought was stated clearly was not clear enough." The couple was survived by two daughters and one son.
Frankfort is a city in Spink County, South Dakota, United States. The population was 149 at the 2010 census.
Brookings is a city in Brookings County, South Dakota, United States. Brookings is the fourth largest city in South Dakota, with a population of 22,056 at the 2010 census. It is the county seat of Brookings County, and home to South Dakota State University, the largest institution of higher education in the state. Also found in Brookings are the South Dakota Art Museum, the Children's Museum of South Dakota, the annual Brookings Summer Arts Festival, and the headquarters of a number of manufacturing companies and agricultural operations.
Waubay is a city in Day County, South Dakota, United States. The population was 576 at the 2010 census.
Schultz taught at Iowa State College from 1930 to 1943.He left Iowa State in the wake of the "oleomargarine controversy", and he served as the chair of economics at the University of Chicago from 1946 to 1961. He became president of the American Economic Association in 1960. He retired in 1967 though he remained active at the University of Chicago into his 90s.
Iowa State University of Science and Technology, generally referred to as Iowa State, is a public land-grant and space-grant research university located in Ames, Iowa, United States. It is the largest university in the state of Iowa and the third largest university in the Big 12 athletic conference. Iowa State is classified as a research university with "highest research activity" by the Carnegie Foundation for the Advancement of Teaching. Iowa State is also a member of the Association of American Universities (AAU), which consists of 60 leading research universities in North America.
The University of Chicago is a private research university in Chicago, Illinois. The university is composed of an undergraduate college, various graduate programs and interdisciplinary committees organized into five academic research divisions and seven professional schools. Beyond the arts and sciences, Chicago is also well known for its professional schools, which include the Pritzker School of Medicine, the Booth School of Business, the Law School, the School of Social Service Administration, the Harris School of Public Policy Studies, the Divinity School and the Graham School of Continuing Liberal and Professional Studies. The university holds top-ten positions in various national and international rankings.
The American Economic Association (AEA) is a learned society in the field of economics, headquartered in Nashville, Tennessee. It publishes one of the most prestigious academic journals in economics: the American Economic Review. The AEA was established in 1885 in Saratoga, New York by younger progressive economists trained in the German historical school, including Richard T. Ely, Edwin Robert Anderson Seligman and Katharine Coman, the only woman co-founder; since 1900 it has been under the control of academics.
Shortly after his move to Chicago, Schultz attracted his former student, D. Gale Johnson to the department. Their research in farm and agricultural economics was widely influential and attracted funding from the Rockefeller Foundation to the agricultural economics program at the University. Among the graduate students and faculty affiliated with the pair in the 1940s and 1950s were Clifford Hardin, Zvi Griliches, Marc Nerlove, and George S. Tolley.In 1979, Schultz was awarded the Nobel Prize in Economics for his work in human capital theory and economic development.
David Gale Johnson was an American economist and an expert on Russia and China. Among other notable contributions to economics, Johnson concluded that the strength of an industry depends on how the market works and not so much on government actions. Johnson was Chairman of the department of economics at the University of Chicago and a member of the National Academy of Sciences. He was also a fellow of the American Agricultural Economics Association and the American Academy of Arts and Sciences. The New York Times called him "a pioneer in agricultural economics". The University of Chicago called him "one of the world’s most eminent researchers of agricultural and development economics". The National Academies Press called him "a scholar of exceptional breadth who made original and important contributions to economics and to public policy".
Agricultural economics is an applied field of economics concerned with the application of economic theory in optimizing the production and distribution of food and fiber. Agricultural economics began as a branch of economics that specifically dealt with land usage, it focused on maximizing the crop yield while maintaining a good soil ecosystem. Throughout the 20th century the discipline expanded and the current scope of the discipline is much broader. Agricultural economics today includes a variety of applied areas, having considerable overlap with conventional economics. Agricultural economists have made substantial contributions to research in economics, econometrics, development economics, and environmental economics. Agricultural economics influences food policy, agricultural policy, and environmental policy.
The Rockefeller Foundation is a private foundation based at 420 Fifth Avenue, New York City. It was established by the six-generation Rockefeller family. The Foundation was started by Standard Oil owner John D. Rockefeller ("Senior"), along with his son John D. Rockefeller Jr. ("Junior"), and Senior's principal oil and gas business and philanthropic advisor, Frederick Taylor Gates, in New York State on May 14, 1913, when its charter was formally accepted by the New York State Legislature. Its stated mission is "promoting the well-being of humanity throughout the world."
While he was chair of economics at Chicago he led research into why post-World War II Germany and Japan recovered, at almost miraculous speeds, from the widespread devastation. Contrast this with the United Kingdom which was still rationing food long after the war. His conclusion was that the speed of recovery was due to a healthy and highly educated population; education makes people productive and good health care keeps the education investment around and able to produce. One of his main contributions was later called Human Capital Theory, and inspired much work in international development in the 1980s, motivating investments in vocational and technical education by Bretton Woods system International Financial Institutions such as the International Monetary Fund and the World Bank. During his research Schultz got down to details and went out among the poor farming nations of Europe, talking to farmers and political leaders in small towns. He was "not afraid to get his shoes a little muddy." He noticed that the aid the United States sent in the form of food or money was not only of little help but actually harmful to such nations, as the farmers and agricultural producers within those nations were not able to compete with the free prices of the "aid" sent and therefore they were not able to sustain themselves or invest the money they made from crops back into the economy. He theorized that if the U.S. instead used its resources to help educate these rural producers and provide them with technology and innovations they would be more stable, productive and self sustaining in the long run. This was another key part of his work "Investment in Human Capital".
Germany, officially the Federal Republic of Germany, is a country in Central and Western Europe, lying between the Baltic and North Seas to the north, and the Alps to the south. It borders Denmark to the north, Poland and the Czech Republic to the east, Austria and Switzerland to the south, France to the southwest, and Luxembourg, Belgium and the Netherlands to the west.
Japan is an island country in East Asia. Located in the Pacific Ocean, it lies off the eastern coast of the Asian continent and stretches from the Sea of Okhotsk in the north to the East China Sea and the Philippine Sea in the south.
The United Kingdom, officially the United Kingdom of Great Britain and Northern Ireland but more commonly known as the UK or Britain, is a sovereign country lying off the north-western coast of the European mainland. The United Kingdom includes the island of Great Britain, the north-eastern part of the island of Ireland and many smaller islands. Northern Ireland is the only part of the United Kingdom that shares a land border with another sovereign state—the Republic of Ireland. Apart from this land border, the United Kingdom is surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the south and the Celtic Sea to the south-west, giving it the 12th-longest coastline in the world. The Irish Sea lies between Great Britain and Ireland. With an area of 242,500 square kilometres (93,600 sq mi), the United Kingdom is the 78th-largest sovereign state in the world. It is also the 22nd-most populous country, with an estimated 66.0 million inhabitants in 2017.
Schultz was awarded the Nobel Prize jointly with Sir William Arthur Lewis for his work in development economics, focusing on the economics of agriculture. He analyzed the role of agriculture within the economy, and his work has had far reaching implications for industrialization policy, both in developing and developed nations. Schultz also promulgated the idea of educational capital, an offshoot of the concept of human capital, relating specifically to the investments made in education.
Schultz received eight honorary degrees in his career. He had the distinction of being the first South Dakota State University graduate and the second South Dakotan to win a Nobel Prize after Ernest Lawrence winner of the 1939 Nobel Prize for Physics. Between 2012 and 2013, South Dakota State University built the Theodore W. Schultz Hall, a residence hall for students pursuing degrees in agriculture.
Schultz died in Evanston, Illinois on February 26, 1998 at the age of 95. He is interred at Badger Cemetery in Badger, South Dakota.
The dominant social thought shapes the institutionalized order of society...and the malfunctioning of established institutions in turn alters social thought.
Most people in the world are poor. If we knew the economy of being poor, we would know much of the economics that really matter.
Schultz, Theodore W. (1956). "Reflections on Agricultural Production, Output and Supply". Journal of Farm Economics. 38 (3): 748–762. JSTOR 1234459.
Schultz, Theodore W. (1960). "Capital Formation by Education". Journal of Political Economy. 68 (6): 571–583. JSTOR 1829945.
Schultz, Theodore W. (1961). "Investment in Human Capital". The American Economic Review. 51 (1): 1–17. JSTOR 1818907.
James Joseph Heckman is a Nobel Prize winning American economist who is currently at the University of Chicago, where he is The Henry Schultz Distinguished Service Professor in Economics and the College; Professor at the Harris Graduate School of Public Policy Studies; Director of the Center for the Economics of Human Development (CEHD); and Co-Director of Human Capital and Economic Opportunity (HCEO) Global Working Group. He is also Professor of Law at the Law School, a senior research fellow at the American Bar Foundation, and a research associate at the National Bureau of Economic Research. In 2000, Heckman shared the Nobel Memorial Prize in Economic Sciences with Daniel McFadden, for his pioneering work in econometrics and microeconomics. As of December 2018, he is the most influential economist in the world.
Human capital is the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value. Human capital theory is closely associated with the study of human resources management as found in the practice of business administration and macroeconomics. The original idea of human capital can be traced back at least to Adam Smith in the 18th century. The modern theory was popularized by Gary Becker, an economist and Nobel Laureate from the University of Chicago, Jacob Mincer, and Theodore Schultz. As a result of his conceptualization and modeling work using Human Capital as a key factor, the Nobel Prize for Economics, 2018, was awarded (jointly) to Paul Romer who founded the modern innovation-driven approach to understanding economic growth.
Gary Stanley Becker was an American economist and empiricist. He was a professor of economics and sociology at the University of Chicago. Described as "the most important social scientist in the past 50 years" by The New York Times, Becker was awarded the Nobel Memorial Prize in Economic Sciences in 1992 and received the United States Presidential Medal of Freedom in 2007. A 2011 survey of economics professors named Becker their favorite living economist over the age of 60, followed by Ken Arrow and Robert Solow.
Myron Samuel Scholes is a Canadian-American financial economist. Scholes is the Frank E. Buck Professor of Finance, Emeritus, at the Stanford Graduate School of Business, Nobel Laureate in Economic Sciences, and co-originator of the Black–Scholes options pricing model. Scholes is currently the chairman of the Board of Economic Advisers of Stamos Capital Partners. Previously he served as the chairman of Platinum Grove Asset Management and on the Dimensional Fund Advisors board of directors, American Century Mutual Fund board of directors and the Cutwater Advisory Board. He was a principal and limited partner at Long-Term Capital Management, L.P. and a managing director at Salomon Brothers. Other positions Scholes held include the Edward Eagle Brown Professor of Finance at the University of Chicago, senior research fellow at the Hoover Institution, director of the Center for Research in Security Prices, and professor of finance at MIT’s Sloan School of Management. Scholes earned his PhD at the University of Chicago.
Development economics is a branch of economics which deals with economic aspects of the development process in low income countries. Its focus is not only on methods of promoting economic development, economic growth and structural change but also on improving the potential for the mass of the population, for example, through health, education and workplace conditions, whether through public or private channels.
Robert Merton Solow, GCIH, is an American economist, particularly known for his work on the theory of economic growth that culminated in the exogenous growth model named after him. He is currently Emeritus Institute Professor of Economics at the Massachusetts Institute of Technology, where he has been a professor since 1949. He was awarded the John Bates Clark Medal in 1961, the Nobel Memorial Prize in Economic Sciences in 1987, and the Presidential Medal of Freedom in 2014. Four of his PhD students, George Akerlof, Joseph Stiglitz, Peter Diamond and William Nordhaus later received Nobel Memorial Prizes in Economic Sciences in their own right.
Wassily Wassilyevich Leontief, was a Russian-American economist known for his research on input-output analysis and how changes in one economic sector may affect other sectors.
The Chicago school of economics is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles.
Sir William Arthur Lewis was a Saint Lucian economist well known for his contributions in the field of economic development. In 1979 he won the Nobel Memorial Prize in Economic Sciences.
George Joseph Stigler was an American economist, the 1982 laureate in Nobel Memorial Prize in Economic Sciences and a key leader of the Chicago School of Economics.
Robert William Fogel was an American economic historian and scientist, and winner of the 1993 Nobel Memorial Prize in Economic Sciences. As of his death, he was the Charles R. Walgreen Distinguished Service Professor of American Institutions and director of the Center for Population Economics (CPE) at the University of Chicago Booth School of Business. He is best known as an advocate of new economic history (cliometrics) – the use of quantitative methods in history.
Jacob Mincer, was a father of modern labor economics. He was Joseph L. Buttenwiser Professor of Economics and Social Relations at Columbia University for most of his active life.
Edmund Strother Phelps is an American economist and the recipient of the 2006 Nobel Memorial Prize in Economic Sciences.
Henry Schultz was an American economist, statistician, and one of the founders of econometrics. Paul Samuelson named Schultz as one of the several "American saints in economics" born after 1860.
The following outline is provided as an overview of and topical guide to economics:
Vernon Wesley Ruttan (1924–2008) was a well-known development economist at the University of Minnesota, where he was Regents Professor Emeritus in the Departments of Economics and Applied Economics. Ruttan's research focused on agricultural development, induced innovation, technical change and productivity growth, institutions, and development assistance policy. His book with Yujiro Hayami, Agricultural Development: An International Perspective was considered a classic in the field and was translated into four other languages.
George Stanford Tolley is an agricultural economist at the University of Chicago. Along with the faculty at the University of Chicago, he has worked on the faculty of North Carolina State University. In 1965-1966, he was Director of the Economic Development Division of the Economic Research Service at the US Department of Agriculture, and in 1974-1975 he was Deputy Assistant Secretary and Director of the Office of Tax Analysis at the US Department of Treasury.
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Herbert A. Simon
| Laureate of the Nobel Memorial Prize in Economics |
Served alongside: Sir Arthur Lewis