Economics awards first Schultz Prize

Daron Acemoglu, the Charles P. Kindleberger professor of applied economics at the Massachusetts Institute of Technology, has been selected by the Department of Economics to be the first recipient of the T.W. Schultz Prize. The prize recognizes exceptional work by an economist in early or mid-career.

He will present a lecture at 4 p.m. Friday, May 14, in the Social Sciences Research Building, Room 122. Acemoglu works on numerous topics, including human capital, wage inequality, unemployment, search theory and economic growth.

To make the selection, a committee of senior economics faculty, chaired by Robert Shimer, Professor in Economics, looked for an exceptional young economist who is not a member of the University faculty.

“We were particularly keen on people whose research would be of interest to a broad cross-section of economists. To start the process, we independently wrote down lists of names. Daron was at the top of all of our lists, so he was the obvious choice,” Shimer said.

Shimer said Acemoglu stood out for a number of reasons, including his writing a series of papers that examine why firms provide workers with general human capital, that is, skills that can be used in many other jobs. Acemoglu’s research shows that superior information about workers’ ability and labor market frictions can provide incentives for firms to engage in a substantial amount of training.

Acemoglu also wrote a series of papers that attempt to disentangle the relationship between strong governmental institutions and economic development. Laws in rich countries that protect property and keep executive powers limited contribute to their prosperity, he shows.

In his presentation Friday, Acemoglu will discuss a third aspect of his work, the behavior of the “skill-premium,” in recent decades in the United States and other countries. He found that the recent increase in the supply of skilled workers caused firms to direct their research and development to produce products that take advantage of the new skill level. As a result, the demand for skilled workers increased with the supply.

Acemoglu has been a member of the M.I.T. faculty since 1993. He received a Ph.D in 1992 from the London School of Economics.

The prize is named in honor of the late Theodore Schultz, a Professor in Economics at the University and a recipient of the Nobel Memorial Prize in Economics.

It is supported with a gift from Robert Fogel, the Charles Walgreen Distinguished Service Professor in the Graduate School of Business, and his wife, Enid.