[Curator’s note: The following material quotes and paraphrases extensively from articles posted by the Nobel Prize Committee, the Princeton Alumni Weekly, and The Daily Princetonian; see Sources below for details.]
Sveriges Riksbank Prize in Economic Sciences /Nobel Prize in Economics: 2000
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2000 was divided equally between James J. Heckman "for his development of theory and methods for analyzing selective samples" and Daniel L. McFadden "for his development of theory and methods for analyzing discrete choice."
In the field of microeconometrics, each of the laureates developed theory and methods that were widely used in the statistical analysis of individual and household behavior, within economics as well as other social sciences.
Microeconometrics – on the boundary between economics and statistics – is a methodology for studying micro data, i.e., economic information about large groups of individuals, households, or firms. Greater availability of micro data and increasingly powerful computers enabled empirical studies of many new issues. For example, what determined whether an individual decided to work and, if so, how many hours? How did economic incentives affect choices of education, occupation, and place of residence? What were the effects of different educational programs on income and employment? James Heckman and Daniel McFadden resolved fundamental problems that arose in the statistical analysis of micro data. The methods they developed had solid foundations in economic theory, but evolved in close interplay with applied research on important social problems. They are now standard tools, not only among economists but also among other social scientists.
Heckman was born in the Chicago, Illinois neighborhood of Hyde Park on April, 1944, to parents Bernice Irene Medley Heckman and John Jacob Heckman. His family lived in the Chicago area until 1956, when they moved to Kentucky, 1956-1957 and Oklahoma, 1957-1958. His brief time in the South and a later trip to the Deep South in the early 1960s with his Nigerian college roommate left lasting impressions as he encountered the system of racial discrimination known as “Jim Crow” in its final manifestation. The separate water foundations, park benches, bathrooms and restaurants of the Jim Crow South were startling. Those experiences motivated his lifelong study of the status of African Americans, and the sources of improvement in that status.
His high school years were spent in Lakewood, Colorado, a suburb of Denver. A decisive influence on his intellectual development was his exposure to Frank Oppenheimer, brother of J. Robert Oppenheimer, Scientific Director of the Manhattan Project that developed the atomic bomb in World War II. Frank Oppenheimer was a distinguished experimental physicist in his own right. In 1958, the Superintendent of the local school district in Lakewood asked Oppenheimer to teach physics to a class of students chosen by competitive exam. He closely linked theory to evidence when he taught physics. Under his guidance, James learned the beauty of experimental science and the pleasure of matching theory to evidence. Although he later abandoned physics for economics, his enthusiasm for scientific empirical work guided by theory was born in the classroom.
Through a series of fortuitous circumstances, Heckman attended Colorado College in Colorado Springs, Colorado on a generous Boettcher Foundation Fellowship given to students from Colorado to attend colleges in Colorado. He received a good education there and majored in mathematics. He also took a wide array of liberal arts courses, including a course on economic development taught by Ray Werner that read through the classics of economics. Reading Adam Smith, David Ricardo, Arthur Lewis and, in a supplement to that course, Samuelson‘s Foundations of Economic Analysis, was an exciting experience that shaped his desire to learn more economics. He received his B.A. in mathematics from Colorado College in 1965.
After college, he briefly attended the University of Chicago in economics. He found Milton Friedman fascinating and also enjoyed the lectures of Harry Johnson.
Princeton University for Graduate School
Heckman received his Ph.D. in economics from Princeton University in 1971 after completing a doctoral dissertation titled "Three essays on the supply of labor and the demand for goods" under the supervision of Stanley W. Black.
He recalled mentors at Princeton who taught him that it was critical to study important social questions. His work examined income distribution, the economics of discrimination, and the effects of education on earnings and health.
“I transferred to Princeton in large part because of Arthur Lewis and his work on economic development. He did not disappoint. My interests in development waned, however, and I was increasingly drawn to the study of labor economics and econometrics. During my graduate student days, there was an ongoing large scale empirical project on labor supply conducted by William Bowen and T. Aldrich Finegan and published in 1969, and projects on labor market models conducted by Orley Ashenfelter, Stanley Black, Ray Fair and Harry Kelejian. These empirical projects were a major source of stimulation to my intellectual development. In addition, I was fascinated by the pioneering work of Richard Quandt on estimating travel demand, a field that would later come to called “discrete choice theory” and in particular, the problem of using econometrics to estimate the demand for new goods. The econometrics group was young and interactive. The ethos at Princeton at that time encouraged the application of economic theory and econometric methods to solve policy problems.
There was ferment in the air both at Princeton and elsewhere as many new sources of microdata became available to study the labor market. There was great intellectual challenge in devising methods to use these data creatively. Modern labor economics as developed by Gary Becker and Jacob Mincer provided an exciting new intellectual framework for interpreting the new microdata. I was particularly struck by the simplicity and elegance of Jacob Mincer’s seminal paper on estimating the labor supply of women. The novelty of that work and the open questions raised by it offered fascinating research opportunities. One of my close advisors, Al Rees, was actively engaged in setting up the first large scale social experiment. I followed this research with interest, enrolling some of the first participants into the New Jersey experiment. The scientific study of labor economics provided the opportunity for me to unite theory with evidence my lifetime intellectual passion.”
Princeton economics professor Bo Honore studied under Heckman at the University of Chicago. Honore said Heckman enjoyed being heavily involved in his graduate students' work, adding that Heckman often collaborated with graduate students on papers and research projects. "Jim Heckman made contributions in many areas of empirical microeconomics and econometrics. His work on sample selection models was especially important." Honore said Heckman was a tremendously hard worker. He frequently worked seven days per week for long hours and expected his students to do the same. "When I would go home at about 1 a.m., his light was always on," Honore recalled. "It was often the only one on in the whole building."
Columbia and University of Chicago
After graduate school, Heckman was offered a position at Columbia University. It was from Kelvin Lancaster that he learned about problems with the representative consumer model and methods for dealing with them. Like Quandt, Lancaster was interested in the problem of estimating the demand for a new good. From Ned Phelps, he learned about the importance of securing micro foundations for macroeconomics and how to write for an audience of professional economists.
The atmosphere at Columbia was open and encouraging. Heckman was drawn to the labor workshop headed by Jacob Mincer and learned from numerous student dissertations written at Columbia at the time. He had the good fortune of being invited to join the National Bureau of Economic Research (NBER) which was then located in New York. NBER had a first-rate group of highly interactive empirical scholars. Victor Fuchs played an important role in shaping this group and holding it together. Jacob Mincer and Finis Welch were the guiding lights of a brilliant empirical environment. He learned from his NBER colleagues and developed a close relationship with Bob Willis that greatly influenced his thinking about the importance of heterogeneity in economics. He also learned from frequent visitors to NBER such as Gary Becker, Reuben Gronau and Sherwin Rosen. NBER at that time was an intense intellectual environment in which data, theory and econometrics were all taken seriously. The research agenda for much of his subsequent research was shaped by stimulating interactions at the New York NBER. In the Summer of 1974, Heckman visited the working group of Daniel McFadden at Berkeley. His ability to unite theory and evidence to solve practical problems set a valuable example and affected Heckman’s approach to empirical work and later generalized his work to dynamic settings.
He was recruited by the University of Chicago in 1973 where he remained except for an occasional leave and a two-year appointment at Yale, 1988-1990. The workshop system encouraged close reading and frank discussions of papers and ideas. When he first arrived, Milton Friedman was the most prominent economist there and set the standard for open in-depth discussions on almost any topic. Others filled his shoes after he retired. Gary Becker, William Brock, Lars Hansen and Jose Scheinkman were especially stimulating and helpful. Heckman enjoyed the cross disciplinary stimulation of his 20-year interaction with the sociologist James Coleman and benefited from many interactions and co-authorships with the versatile Burton Singer of Princeton.
Academic Career and Honors
Heckman has been in the Department of Economics at the University of Chicago since 1973. He was one of the founders of the Harris School of Public Policy, where he also had an appointment. He held an appointment at the Law School at the University of Chicago. In May 2014, he launched the Center for the Economics of Human Development at the University of Chicago which he directed. He is the Henry Schultz Distinguished Service Professor in Economics and the College at the University of Chicago.
He received numerous other awards for his work, including the John Bates Clark Medal of the American Economic Association in 1983; the Jacob Mincer Award for Lifetime Achievement in 2005 from the Society of Labor Economics; the 2005 and 2007 Dennis Aigner Award for Applied Econometrics from the Journal of Econometrics; the Ulysses Medal from the University College Dublin in 2006; the 2007 Theodore W. Schultz Award from the American Agricultural Economics Associatio;, the Gold Medal of the President of the Italian Republic, awarded by the International Scientific Committee of the Pio Manzú Centre in 2008; the Distinguished Contributions to Public Policy for Children Award from the Society for Research in Child Development in 2009; the Frisch Medal from the Econometric Society in 2014 for the most outstanding paper in applied economics published in Econometrica in the previous five years; and the 2016 Dan David Prize. He was made a Distinguished Fellow of the American Economic Association in 2017, and is the 2019 recipient of the Chinese Government Friendship Award.
He was a member of the National Academy of Sciences, USA, a member of the American Philosophical Society, a fellow of the American Academy of Arts and Sciences, the American Association for the Advancement of Science, the Econometric Society, the Society of Labor Economics, the American Statistical Association, the International Statistical Institute, and the National Academy of Education. He received numerous honorary degrees including the University College London in 2013, and is a foreign member of Academica Sinica and the Brazilian Academy of Sciences.
James Heckman received Princeton’s James Madison Medal in 2016.
• Les Prix Nobel. The Nobel Prizes 2000, Editor Tore Frängsmyr, Nobel Foundation, Stockholm, 2001. This autobiography/biography was written at the time of the award and later published in the book series Les Prix Nobel/ Nobel Lectures/The Nobel Prizes. The information is sometimes updated with an addendum submitted by the Laureate. Copyright © The Nobel Foundation 2000. To cite this section MLA style: James J. Heckman – Biographical. NobelPrize.org. Nobel Prize Outreach AB 2022. Tue. 7 Jun 2022.
• Daily Princetonian, Volume 124, Number 91, 12 October 2000, Grad School Alum Wins Nobel Prize