A coal town and Brooklyn
Gary Stanley Becker was born on December 2, 1930, in Pottsville, a small coal-mining town in eastern Pennsylvania, into a Jewish family. His father had left Montreal and his family for the United States at sixteen and moved from place to place in the East before settling in Pottsville, where he owned a small business. His mother’s family had emigrated from Eastern Europe to New York when she was six months old. Both parents had left school after the eighth grade, his father because he was eager to make money and his mother because girls were not expected to get much education.
When Gary was four or five the family moved to Brooklyn, where his father became a partner in another business and Gary went through elementary and high school. Until sixteen he cared more about sports than books; when the handball team and the math team met at the same time, he chose math, although he was better at handball. After his father lost most of his sight, Gary read him stock quotations and financial reports. The house was full of lively arguments about politics and justice, and by the end of high school, he wrote, his love of mathematics was competing with a desire to do something useful for society.
Princeton, Chicago and Milton Friedman
At Princeton he took an economics course almost by accident and was drawn to a subject that brought mathematical rigour to social organisation. To become financially independent sooner, he graduated in three years, in 1951. By then he had grown bored with economics, which seemed to ignore important social problems, and he considered switching to sociology.
Instead he went to the University of Chicago, where Milton Friedman’s course on microeconomics renewed his excitement. Friedman taught that economic theory was not a game for clever academics but a powerful tool for analysing the real world. Becker was also influenced by Gregg Lewis’s work on labour markets, Theodore Schultz’s pioneering research on human capital and Leonard Savage’s work on probability. He received his PhD in 1955.
The economics of discrimination
Becker’s dissertation, published in 1957 as The Economics of Discrimination, was the first systematic attempt to use economic theory to analyse how prejudice affects the earnings, employment and occupations of minorities. He treated prejudice as a “taste” that people are willing to pay to indulge, and showed that discrimination carries a real cost, including for the employers who practise it, because they pass over productive workers and must pay more to others.
For years the book had little visible impact. Most economists did not think racial discrimination was economics, and sociologists and psychologists did not think he was contributing to their fields. Becker later said the support of Friedman, Lewis and Schultz was crucial to his willingness to persevere in the face of much hostility. In time his framework became the starting point for the economic study of discrimination in labour markets, and for measuring wage gaps between groups.
Human capital
In 1957 Becker turned down a much higher salary to stay at Chicago and moved to Columbia University and the National Bureau of Economic Research in New York. His first project for the Bureau became his most influential book, Human Capital (1964). The term itself was older, but Becker built its microeconomic foundations. His central idea was that spending on schooling, on-the-job training and health is an investment, like a company’s purchase of machinery: it costs money and time now and raises a person’s productivity and earnings later.
That simple idea made it possible to measure the return to a year of school or a training programme, to explain why wages rise with experience, and to study how education contributes to economic growth, migration and health. With his Columbia colleague Jacob Mincer he ran a workshop that trained a generation of labour economists. The Nobel committee called the human capital approach perhaps his most noteworthy contribution and said it was hardly an overstatement to call it one of the most empirically applied theories in economics. Governments and international organisations now routinely describe spending on education, skills and health as investment in human capital, the language and method that Becker made rigorous.
Time, families and children
Becker pushed economic reasoning into the home. In “A Theory of the Allocation of Time” (1965) he treated a household as a small factory that combines purchased goods with family members’ time to produce meals, child care and leisure. When wages rise, time becomes more valuable, which helps explain why married women increasingly took paid work and why households buy more labour-saving goods. In an earlier essay on fertility (1960) he argued that parents weigh the number of children against how much they invest in each one, which helps explain the long fall in birth rates as countries grow richer.
After returning to Chicago in 1970 he worked mainly on the family, analysing marriage, divorce, altruism within families and parents’ investments in children. The work culminated in A Treatise on the Family (1981), greatly expanded in 1991. His household models drew strong criticism from feminist economists, who argued that they treated existing gender roles as efficient choices rather than as products of discrimination and unequal power, and who developed bargaining models of the household in response.
Crime and punishment
In “Crime and Punishment: An Economic Approach” (1968), Becker proposed treating most criminal behaviour as a response to incentives: people weigh the gains from crime against the chance of being caught and the severity of punishment. The idea gave policymakers a framework for asking which mix of policing, prosecution and penalties reduces crime at the least cost, and empirical work in this tradition found that the probability of being caught tends to deter more than the severity of punishment. The jurist Richard Posner called the paper a fount of economic writing on crime and its control.
Becker applied the same reasoning to other controversial questions. In 2007, with Julio Elias, he argued that paying donors could relieve the chronic shortage of organs for transplant, a proposal critics said would risk exploiting poor donors.
A public voice
Back in Chicago, George Stigler became one of his closest friends and a major influence. Together they wrote two influential papers, a controversial one arguing that people’s underlying tastes are stable and an early treatment of what economists now call the principal-agent problem, the difficulty of making sure that someone acting for you serves your interests. Stigler also revived Becker’s interest in politics, and in the 1980s Becker published a theory of how competing interest groups shape government policy, which became a cornerstone of what is called Chicago political economy.
Becker’s approach was long considered eccentric. “For a long time,” he wrote, his kind of work was “either ignored or strongly disliked by most of the leading economists.” Opinion shifted. He received the John Bates Clark Medal in 1967, served as president of the American Economic Association, and in 1983 accepted a joint appointment in Chicago’s sociology department, where he and James Coleman ran an influential seminar on rational choice in the social sciences. In 1992 he received the prize in economic sciences for having extended the domain of microeconomic analysis to a wide range of human behaviour and interaction, including non-market behaviour.
He was also a public writer. From 1985 to 2004 he wrote a monthly column for Business Week, alternating with the liberal Princeton economist Alan Blinder, and from 2004 he and Judge Richard Posner wrote the Becker-Posner Blog. A political conservative, he advised Bob Dole’s 1996 presidential campaign. He received the National Medal of Science in 2000 and the Presidential Medal of Freedom in 2007.
Family and Jewish roots
Becker grew up in a Jewish immigrant family in Brooklyn, the child of parents with little schooling who valued arguments about justice at the dinner table. The Jewish Telegraphic Agency’s obituary identified him as Jewish; he did not write publicly about religious practice.
In 1954 he married Doria Slote, with whom he had two daughters, Judy and Catherine; Doria died in 1970. In 1980 he married Guity Nashat, a historian of the Middle East whose interests overlapped with his own, and he became stepfather to her sons. He left Columbia in part over the 1968 student protests, believing the university should have defended free inquiry more firmly, and returned to Chicago, where he remained for the rest of his life, later also as a senior fellow of the Hoover Institution.
Death and legacy
Becker died in Chicago on May 3, 2014, aged 83, after a long illness, still an active member of the University of Chicago’s economics department and business school and chair of the Becker Friedman Institute. Milton Friedman had called him the greatest social scientist who lived and worked in the second half of the twentieth century.
His legacy is a way of seeing. Before Becker, economists mostly studied markets for goods and money; after him, they studied education, discrimination, crime, marriage, fertility and health with the same tools, and policymakers gained a way to weigh the costs and benefits of schooling, training and anti-crime programmes. Even critics who reject his conclusions work on the questions he opened.
Sources & further reading
Gary S. Becker, Biographical, NobelPrize.org · Press release: The Prize in Economics 1992, NobelPrize.org · Gary Becker, Nobel Prize-winning economist, dies, Jewish Telegraphic Agency · Gary Becker, 1930–2014, Chicago Booth · Gary Becker, Wikipedia · Researched from the sources above and checked against them. Spotted an error? Tell us.
A life of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.