Couple Abhijit Banerjee and Esther Duflo Share Nobel Prize for Economics, Making History

Along with Michael Kremer, Nobel committee recognizes Abhijit Banerjee and Esther Duflo’s experimental approach in alleviating the global poverty. The Royal Swedish Academy of Sciences announced the Nobel Prize for Economic Sciences for 2019 to the three economists Abhijit Banerjee, Esther Duflo and Michael Kremer. Duflo also made history by becoming only the second woman in 50 years to be awarded a Nobel in Economic Sciences.

Abhijit Banerjee, Esther Duflo and Michael Kremer research work, ‘experimental approach to alleviating poverty’ has, in the last two decades found out some reliable answers about the ways to fight global poverty.

After the announcement of the Nobel Prize for Economics, at a press conference at MIT Abhijit Banerjee said, “It is particularly wonderful because the prize is not for us, but for the entire movement 400-plus professors associated with J-PAL work. It is fun, learning new things. We are looking for results from the latest intervention”.

The couple, Abhijit Banerjee and Esther Duflo is professors associated with the department of economics at the Massachusetts Institute of Technology (MIT), whereas Michael Kremer is a professor in the department of economics in Harvard University. 

Abhijit Banerjee, was born in Mumbai in the year 1961, had his schooling in Kolkata’s South Point School and then at the University of Calcutta and the Jawaharlal Nehru University before receiving his Ph.D. from Harvard University in the year 1988. Michael Kremer too obtained his Ph.D from Harvard University in the year 1992, while Esther Duflo received her doctorate from MIT in the year 1999.

Abhijit Banerjee and Esther Duflo are also the board of directors of the Abdul Latif Jameel Poverty Action Lab, founded in the year 2003, the lab works to reduce poverty by ensuring policies are informed by scientific evidence. 

In an interview recently, Duflo said that in order to devise effective policies to help people get out of the poverty, it is important to understand them more deeply. As she says, “without spending some time understanding the intricacy of the lives of the poor and why they make the choice that they make, and why something that might seem at first surprising makes a lot of sense in a particular logic, it is impossible to design the right approach”.

They started their research, breaking down the problems of global poverty into a number of smaller and more precise questions at the individual and group level and has redefined research in development economics over the last 20 years. 

The three Laureates have worked with local NGOs in India and Kenya, to perform field experiments and to study how individuals behave in their everyday environment. During 2001 and 2004, Abhijit Banerjee and Esther Duflo along with two other researchers evaluated the Balsakhi Program. 

Balsakhi is an educational remedial intervention program, which was implemented in 122 public primary schools in Vadodara and 77 schools in Mumbai, in association with NGO Pratham.

In Vadodara, in the year 2001 half of the schools were given a tutor for grade 3 and the other half for grade 4. On the other hand in Mumbai during that same year, approximately half of the schools received a tutor for grade 3, and the other half received a tutor for grade 2. In the course of time both in Vadodara and Mumbai, the Balsakhi program significantly improved overall test scores. 

During the Lok Sabha election this year, Congress Party of India approached, Abhijit Banerjee for its NYAY or minimum guaranteed income scheme. At that time, Banerjee had suggested a monthly income of about Rs 2,500 to Rs 3,000 to those who are below the poverty line. The party in its manifesto announced a monthly income of Rs 6,000 to every BPL family.

Abhijit Banerjee had also come down heavily on the NDA government’s decision to demonetize currency notes and said at that time that, it would adversely impact the informal sector, which undertakes much of its transactions in cash. 

In May this year, he has also signed a letter along with more than 100 economists, raising concerns over ‘political interference’ in statistical data. During the latest press conference when he was asked a question on the Indian economy, Banerjee said, “Doing very badly.” Quoting the National Sample Survey, he said, “The average consumption in urban and rural areas has slightly gone down. This is a glaring warning sign.”