Selected comments from the University of Chicago press conference concerning the Nobel Memorial Prize in Economic Sciences, shared by James Heckman, the Henry Schultz Distinguished Service Professor in Economics and in the Irving B. Harris School of Public Policy Studies at Chicago, Oct. 10, 2000.

Don Michael Randel

President

University of Chicago

"Some of what we celebrate today is, of course, not news, and that is that James Heckman is a very distinguished scholar, someone in whose work his closest colleagues have taken pride for a long time. What is news, of course, and what we celebrate particularly is that the quality of his work, his contribution to the discipline of economics, has been recognized by a Nobel Prize.

"The entirety of the university community and its alumni take great pleasure in this. We bask in reflected glory. It’s not as if this hasn’t happened to the University of Chicago before and I’m confident this won’t be the last time. Each and every one, however, is a signal occasion and Professor Heckman’s recognition in this way is something in which we take a very great deal of pride…

"He is a member of the Department of Economics, of course, but has also been closely associated with the Harris School since its founding. And that reflects, I think, a particular quality of the kind of work that goes on in the university, the ways in which the work in one department often spreads across other disciplines, in this particular case to a school that is very much concerned about the study of real-world problems affecting living and breathing human beings."

"I extend my warmest congratulations to Professor Heckman and to his family and I do so in the name of all of his colleagues and members of the University of Chicago family everywhere."

Robert Michael

Dean and Eliakim Hastings Moore Distinguished Service Professor

in the Irving B. Harris Graduate School of Public Policy Studies

University of Chicago

"I want to take the opportunity to acknowledge the important role Jim’s played in the creation of our school. He was a part of the faculty committee that promoted the creation of the policy school some 15 years ago. He was a founding member of the faculty. He remains an affiliated member, and he exemplifies, I think, what goes on in the application of the social sciences, in the study of social public policy issues. Jim’s an exemplar of an individual who brings first-rate economic theory, combines it with first-rate methodology and technique, of using data to address really important social issues, social problems. No one of those three would characterize Jim adequately.

"It’s not just the theory, though it’s outstanding. It’s not just the method, though that’s superb. It’s the application of the theory and method and the data to produce evidence about important social issues. And he is a real scientist. Jim is one who is skeptical about taking a correlation and seeing causation and making a big deal of it. Very often, the kind of data social scientists have to use, coming from natural experiments, are not like those that comes out of a science where one can constrain the data as in a laboratory. We have to work with real data. Real-life data often isn’t in the right form for answering important questions. Jim’s contribution has been in recognizing that, being dissatisfied with that, and going out and finding statistical techniques and improved data, so that one can in fact address important topics and get answers that are important…

"Take the role of schooling on the earnings of women, and one has a group of women that has…different levels of schooling and different earnings and one can study the effect of the schooling on the earnings, but not all women work. What about the women who have the schooling and aren’t working? Part of the subset is the subsample of those working, typical of all women, and can one infer from the evidence on those women who do work what the effect of schooling is on the potential earnings of all women? No. Heckman has worked on that and come up with a technique to deal with the fact that the data we have are censored. It’s a select sample of women for whom we have the evidence and we have to be able to adjust for that.

"Another quick example, the Job Training Partnership Act, JTPA, training for low-income workers. One can look and see and compare those that have gone through that kind of a program and see the impact of it on the earnings of those that have had the training compared to those that have not. Ah, but those that have taken the training are not a subset, a random set, of all unskilled workers. They may be more motivated. They may be more skilled. They may be more energetic. They may be luckier. They have selected themselves into those programs, so one can’t infer from the difference in their earnings compared to those without the program whether the program generated the increase in their earnings. Mr. Heckman has the technique for adjusting for that kind of selectivity.

"The wonderful thing about Jim is he is a fine scientist. One never knows when Jim takes on the topic what the answer is going to be. He has found some of these social programs more effective than one would have thought, others less effective than one would have thought, and he is an exemplar of bringing first-rate theory and empirical techniques and data to important topics. We’re all so very proud of him and delighted to be associated with him and sorry he’s not here today. Thank you."

Lars Peter Hansen

Homer J. Livingston Professor and Chairman

Department of Economics

University of Chicago

"This is a very exciting award. It’s shared by Jim Heckman and Dan McFadden, who are both pioneers in a field called microeconometrics. While three decades ago a variety of data started to become available on the behavior of individuals, and more recently, firms–and this was data that was repeated over time–the challenge to economists was how to use these data to answer questions about economic and social policy. To extract the information required explicit modeling of decision processes and incentives faced by the economic decision-makers. These were not purely statistical questions, but required explicit economic frameworks to address them. Both Heckman and McFadden combined insights from economic theory to develop usable statistical methods and to extract information of value to both economists and policymakers. These methods have been and continue to be applied extensively, refined by Jim Heckman and a variety of others. Microeconometrics has truly become an exciting field and Heckman and McFadden, in completely separate work, are the pioneers of this field.

"While Jim began doing research on fundamental importance back in the ‘70s, he continues be, in my view, the best empirical microeconomist in the world. His research has focused on the study of social policy evaluation, including job-training programs, including taxation, education and search subsidies. Incorporation of economic incentives to participate in publicly subsidized program is at the heart of many of his analyses. His recent research was featured this summer in the…world meetings of the Econometric Society. He continues to be an incredibly energetic and important scholar…"

Gary Becker

1992 Nobel Laureate in Economic Sciences

Professor in Economics and Sociology

University of Chicago

"Jim has been my colleague ever since he came to the University of Chicago, which then I think was…’72 or ’73. I came also from Columbia, we both came. I came a couple years earlier, certainly more senior to Jim, and so we have now been colleagues for almost 30 years…

"It’s easy to appoint people after they’ve made their significant contributions. But the great skill of the University of Chicago and in particular the Economics Department, was to find people who had the potential to be Nobel Prize winners, who were young yet, and to make them appointments when they weren’t so popular, so well-known, and that was certainly the case with Jim. He did his, pretty much all his major work here in the Department of Economics.

"Now we’ve heard some very good presentations by Bob Michael and Lars Hansen on some of his contributions. I’ll just briefly elaborate in a couple of directions on them. Let me first say that Jim is what sometimes you might call an economist’s economist. He hasn’t sought appointments in Washington. He does very little…media activity. He’s a serious scholar whose work has influenced public policy, to be sure, and sometimes in very important ways. But he’s been mainly concerned with his research and teaching and has continued to do that throughout his career. And he’s still going very strongly with almost unlimited energy, great vitality and enormous enthusiasm for using economics to study important problems…"

"We’ve heard a few examples of the important problems he dealt with. From what I saw on the Web, he was given the prize for his statistical techniques, mainly that he developed and they are used widely and extensively, not only by economists, but by other social scientists. But Jim’s first and foremost interest is not in technique per se. It’s in substantive economics, usually questions that have a major policy aspect to them, although he will attack them often not directly from the policy point of view, but for understanding various types of behavior."

"So, for example, we want to know what forces induce married women to enter the labor force. This has been one of the remarkable changes in labor-force participation during the last 30 years. Which women come in, work full-time, which women are more likely to work part-time or to remain at home? Now that may seem like a simple question, but because women are making these choices in ways that sometimes economists cannot fully observe the considerations that go into it, becomes a challenging statistical problem. And I think that was the kind of problem that initially stimulated Jim to work out the techniques for which the Nobel committee cited his enormously important contribution.

"Let me give you another practical issue. We observe that students in Catholic schools perform better on test scores than students in public schools, even if you look at students who come from similar family backgrounds, education, income and the like. Is it because the Catholic schools are doing a better job, or is it because the parents who choose to send their children to Catholic schools are more educationally motivated? That’s a very difficult question. It’s a question of enormous importance as we consider now in the United States the issue of charter schools, voucher systems and other ways of permitting greater choice.

"Well, Jim not only has himself worked on that question, but the techniques he used to try to answer that difficult question of what is it, is it the school or is it the parents, the techniques that he pioneered are used by everybody, whether it’s Jim’s own work; whether it’s the work of some of the students we’ve had here and colleagues or it’s the work of people completely, maybe they’re working in another country or even on one of the coasts, east or west coasts. And one can go on to give examples of that.

"So let me repeat what I consider his major contribution to economics…It’s…to develop rigorous statistical techniques of analysis, but it’s oriented to answering important practical questions. And virtually all of Jim’s work deals with important practical questions, but deals with it the way a scientist deals with questions and not the way an advocate deals with questions: go back to the scientific issues involved and see if by using the best scientific techniques that we have available in economics, and as Bob Michael said, we cannot easily do experimentation and the like. But we do have techniques…Jim has been a pioneer in developing techniques and he’s always done it as a scientist, not as an advocate, and that’s one reason I believe his work has been so influential and why he so richly deserves this prize. Thank you."

Becker on the tradition of economics Nobels at Chicago:

"The Economics Department at Chicago has had a remarkable run, probably the greatest run of any department of any field…in terms of achieving Nobel Prizes. And so everybody in the department, students, faculty, share in that honor and pleasure. Now, the question is why is it? If all departments could answer that question, it would not only be Chicago. But I’ll try to give you what I think have been important for our department. One, to get people early on in their career, prior. Almost everybody in our department who’s won the Nobel Prize and others who will win the Nobel Prize, we attracted these people prior to their major work. Now, that’s not easy to do.

"When somebody has done major work, it’s usually pretty well-recognized, and so a lot of schools want to get these people, and that’s fine. But to attract people prior to the work takes some courage in putting, so to speak, your chips in places where there’s a great deal of uncertainty. I think we’ve done that and the reason I think we’ve been able to do that successfully is that we have generally, despite our reputation as a highly conservative department, have looked at people who do a couple of things mainly. One, they take economics seriously. They treat it not as a game to be played by clever academics, but as a field that can contribute greatly to the understanding and hopefully to the solution of major economic and social questions. That’s what we look for. People who take economics seriously and are working on significant economic problems."

James Heckman, the Henry Schultz Distinguished Service Professor in Economics and in the Irving B. Harris School of Public Policy Studies, University of Chicago, via speaker phone from Rio de Janeiro:

"I didn’t realize this until a few minutes ago: this is the first time anybody in Brazil has received the Nobel Prize. I’m obviously very surprised. I’m very honored and I feel a sense of deep gratitude and I would say surprised, just more, just a genuine sense of surprise, a happy surprise. All surprises aren’t happy as this one is. And that’s my personal reaction…"

"This work that I’m doing has to do with a longstanding interest that I’ve had in Latin America and in labor-market reform in Latin America, and I’ve actually been talking to the press about…labor reform and labor regulation and also job training in Latin America. I’m actually technically down here to work with a network of young Latin American economists who are developing skills in empirical microeconomics. Chicago has a longstanding tradition, doing research in Latin America…We have excellent students here doing the work and we have excellent students right now on the campus who are going to be trained to come down and do the work. So I’m happy to be a part of this tradition and contribute to it."

About the tradition of Nobel Prizes, particularly in economics, at Chicago:

"I feel relieved to get a Nobel Prize...I remember a few years ago, Professor Lucas got a prize, a well-deserved prize. I remember some reporter called me and said, how does it feel to be at Chicago without a Nobel Prize?…I have to admit, after awhile it starts to hurt ...I can only say how much I deeply respect the people at Chicago. The intellectual level at Chicago is the highest in the entire economics profession…I overheard some of what Gary Becker was saying and I would agree. I didn’t hear it all, but I agree with what I heard in the sense that there is an earnestness about economics and data and the idea that economics…is a field…that tackles real problems that I think has always been attractive to me. But at the same time there’s this high level of intellectual integrity, which asks of everyone in the environment: students, junior faculty, faculty of all stages, that forces a discipline on you. It can be harsh and it’s very valuable. It’s extremely valuable and you learn ideas, you test ideas…"

The environment on economics scholarship at Chicago "really weeds out the second rate. If you don’t like to be challenged…you won’t stay at Chicago…It’s a healthy environment because it’s an honest environment. At the end of the day people aren’t picking on you because they don’t like they way you look or smell or…how you reason and the quality of your work, so I’m happy to have been a part of it."