April 30, 1902|
Arlington, South Dakota, United States
|Died||26 February 1998
Evanston, Illinois, United States
|Institution||Iowa State University
University of Chicago
School or tradition
|Chicago school of economics|
|Alma mater||South Dakota State University
University of Wisconsin-Madison
|Awards||Nobel Memorial Prize in Economic Sciences (1979)|
|Information at IDEAS / RePEc|
Theodore William "Ted" Schultz (30 April 1902 – 26 February 1998) was an American economist, Nobel Laureate, and chairman of the Chicago School of Economics. Schultz rose to national prominence after winning the 1979 Nobel Memorial Prize in Economic Sciences.
Early life and education
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 eighth-grade, his father Henry decided to pull him out of Kingsbury County Schoolhouse No. 19. His father’s view was that if his eldest son left the farm and 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. Schultz eventually enrolled in the Agriculture School 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 would receive 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 the thesis, entitled The Tariff in Relation to the Coarse-Feed Grains and a Development of Some of the Theoretical Aspects of Tariff Price Research.
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 would be 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 thusly: "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.
He taught at Iowa State College from 1930 to 1943. He left Iowa State in the wake of the famous Oleo-Butter War, 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.
Contribution to economic theory
While he was chair of economics at the University of 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 healthcare keeps the education investment around and able to produce. One of his main contributions was later called Human Capital Theory, and inspired a lot of 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.
Nobel Memorial Prize in Economic Sciences
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 on 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. As well as 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 to 2013, South Dakota State University built the Theodore W. Schultz Hall, a residence hall from students pursuing degrees in agriculture.
The dominant social thought shapes the institutionalized order of society...and the malfunctioning of established institutions in turn alters social thought.
— Theodore W. Schultz (1977)
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.
- 1943. Redirecting Farm Policy, New York: Macmillan Company.
- 1945. Agriculture in an Unstable Economy, New York: McGraw-Hill.
- 1953. The Economic Organization of Agriculture, McGraw-Hill.
- 1963. The Economic Value of Education, New York: Columbia University Press.
- 1964. Transforming Traditional Agriculture, New Haven: Yale University Press.
- 1968.Economic Growth and Agriculture, New York: MacGraw-Hill.
- 1971. Investment in Human Capital: The Role of Education and of Research, New York: Free Press.
- 1972. Human Resources (Human Capital: Policy Issues and Research Opportunities), New York: National Bureau of Economic Research,
- 1981. Investing in People, University of California Press. Description and chapter-preview links.
- 1993. The Economics of Being Poor, Cambridge, Massachusetts, Blackwell Publishers
- 1993. Origins of Increasing Returns, Cambridge, Massachusetts, Blackwell Publishers
- 1945. Food for the World, Chicago: University of Chicago Press.
- 1962. Investment in Human Beings, Chicago: University of Chicago Press.
- 1972. Investment in Education: Equity-Efficiency Quandary, Chicago: University of Chicago Press.
- 1973.New Economic Approaches to Fertility, Chicago: University of Chicago Press,
- 1974. Economics of the Family: Marriage, Children, and Human Capital, Chicago: University of Chicago Press.
- Shaars, Marvin A. (1972). "The Story of The Department of Agricultural Economics: 1909–1972" (PDF). Retrieved 2009-09-17.
- "the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1979Theodore W. Schultz, Sir Arthur Lewis". Nobelprize.org. Retrieved October 3, 2012.
- "Theodore W. Schultz". Find A Grave. Retrieved October 3, 2012.
- "Theodore Schultz, 95, Winner Of a Key Prize in Economics". The New York Times. Retrieved October 3, 2012.
- Justin Yifu Lin. "Cambridge University Marshall Lecture – Development and Transition: Idea, Strategy, and Viability" (PDF).
- Theodore W. Schultz, 1981.Investing in People. p. 3. University of California Press.
|Wikimedia Commons has media related to Theodore Schultz.|
|Wikiquote has quotations related to: Theodore Schultz|
- New York Times: Theodore Schultz, 95, Winner Of a Key Prize in Economics
- Nobelprize.org: Autobiography
- Theodore William Schultz (1902–1998). The Concise Encyclopedia of Economics. Library of Economics and Liberty (2nd ed.) (Liberty Fund). 2008.
- Theodore Schultz at Find a Grave