Chicago's Lock on the Nobel : Economics Professor Is University's Third Winner in 3 Years

By JONATHAN PETERSON

Oct. 14, 1992 12 AM PT

TIMES STAFF WRITER

WASHINGTON —

The 1992 Nobel Prize for economics has been awarded to Gary S. Becker, a University of Chicago professor who has used economic theory as a key to explore riddles about families, the work force, crime, discrimination and other social issues, the Swedish Academy of Sciences announced Tuesday.

Becker, a professor of economics and sociology whose work was once shunned by the academic Establishment, was awarded the $1.2-million prize for applying economic analysis to a range of human behavior that extends far beyond the traditional domain of his field.

The Swedish academy noted that Becker “has formulated a general theory for behavior of the family, including not only the distribution of work and the allocation of time in the family, but also decisions regarding marriage, divorce and children.”

Becker is the third University of Chicago professor in as many years to win the prestigious prize.

The Nobel laureate, 61, is also senior fellow at the Hoover Institution at Stanford University and writes a column for Business Week magazine. In recent months, he has commented on global warming, upward mobility for the urban poor, industrial policy, affirmative action, federal protections for the disabled, medical insurance costs and other issues.

“Most of my career, this was considered way-out economics,” Becker said Tuesday of his penchant for tackling social problems. “Some people would call it crazy economics--not even economics at all. I went against the grain of the profession for a long period of time.”

The economist, born in the eastern Pennsylvania town of Pottsville, is a graduate of Princeton University. He attended graduate school at the University of Chicago, where he got his Ph.D. He has taught at the University of Chicago and Columbia University in New York.

One longtime colleague described him as “incredibly intense” and hard-driving. “He acts like a first-year assistant professor who’s in quest of tenure right now,” said Edward P. Lazear, a scholar at Hoover and Stanford University who has been friends with Becker for 20 years.

Rather than devote his life work to esoteric questions about the economy, Becker has been drawn to such down-to-earth matters as “what determines whether or not people marry, whether they get divorces, how many children they have, will the wife work or stay home?”

“My economics is not driven by dollars and cents,” he said in an interview, “but driven by the kinds of incentives people have.”

For instance, he explained: “Take the issue of crime. Do potential criminals respond to incentives, such as whether they’ll be punished enough, or is crime somehow automatic? I argue that it’s not automatic.”

Yet even as his achievements are admired in once-resistant scholarly circles, Becker’s strong views against government regulation aren’t universally appreciated. He has opposed government rules to aid the disabled, affirmative action and other public-sector attempts to control private-sector behavior.

In his most recent Business Week column, for example, he said he preferred George Bush’s approach to education reform and training workers over Bill Clinton’s because Bush relies more “on voluntary private choice than on compulsion” by the government.

“Whatever Becker writes is highly controversial,” said Sar Levitan, director of the Center for Social Policy at George Washington University. “I would characterize him as a right-winger.”

On Tuesday, Becker received kudos from some colleagues for his success at bringing insight to questions of ordinary life through imaginative use of economic tools.

He is best known for work in four areas: investment in labor--economists call it human capital; behavior of the family; crime and punishment, and discrimination in labor and other markets.

“He’s done enormously important work in terms of applying economics to socially important issues,” said Robert Barro, a professor of economics at Harvard University. “It’s led to a greater understanding of the forces that shape social interaction. . . . he opened up a lot of fields.”

Becker made an early splash in the 1950s with a Ph.D. thesis on the economics of discrimination, and his 1964 work, “Human Capital,” helped create the intellectual foundation for the notion that investments in a person’s education and training have important similarities to investments in business equipment.

His 1981 book, “A Treatise on the Family,” applied economic theory to such non-financial matters as choosing a spouse and having children. One conclusion: The entry of women into the work force along with women’s increased earning power have reduced the demand for children, as the time of mothers has become more valuable.

He is now looking at the problems of addiction, particularly to cigarettes and illegal drugs.

Sherwin Rosen, chairman of the University of Chicago Economics Department, said Tuesday that Becker’s “courage to take huge risks” was a striking character trait of the scholar.

“He has always gone against the grain,” Rosen said. “He’s very unfashionable in that way. He has overcome a lot of obstacles to get his work accepted, but it has paid off. He’s recognized as one of the extraordinary talents in the field.”

Becker had been touted as a likely winner in the past. But after having been passed over a couple times in favor of other colleagues, he said that Tuesday’s 6 a.m. wake-up call from Stockholm came as a big surprise.

“But I’m happy to have won it when I wasn’t expecting it,” he said. “It’s a very good feeling.”

And as he got ready for an impromptu celebration with friends and colleagues, he acknowledged that his newest economic problem--what to do with $1.2 million--shouldn’t cause too much agonizing: “I think spending a large windfall should be one of life’s easier decisions,” he said.

The Nobel Winner

G ary S. Becker becomes the third University of Chicago professor in as many years to win the Nobel Memorial Prize in Economic Science. Here is some background on him: Who: Gary S. Becker, 61, a University of Chicago professor.

Work: He turned to economics to solve social problems such as issues of family, race and gender discrimination, crime and education. He advocates marital contracts spelling out child custody and property division, suggesting that the divorce rate might be lowered if marriage were treated as a long-term agreement.

Award: $1.2 million.

Personal: Married with four children.

Background: Born in Pottsville, Pa., in 1930, he attended Princeton University as an undergraduate and completed his graduate work at the University of Chicago. He also teaches sociology and is affiliated with the Hoover Institution at Stanford University.

Books: “The Economics of Discrimination” of 1957, “Human Capital” from 1964 and “A Treatise on the Family,” published in 1981.

Quote: “I was interested in social problems but felt that economics had the tools by which to handle these long-term interests and social questions.”

Source: Times Wire Services

Nobel Economics Laureates

Winners of the Nobel Memorial Prize in Economic Science since 1969, when the award was created:

1992: Gary S. Becker, United States

1991: Ronald Coase, United States (British-born)

1990: Harry M. Markowitz, William F. Sharpe, Merton Miller, all United States

1989: Trygve Haavelmo, Norway

1988: Maurice Allais, France

1987: Robert M. Solow, United States

1986: James M. Buchanan Jr., United States