Abhijit Banerjee

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(From left) 2019 Nobel laureates in Economic Sciences Michael Kremer, Esther Duflo, and Abhijit Banerjee at a press conference at the Royal Swedish Academy of Sciences, Stockholm, December 7, 2019.

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Abhijit Banerjeeis an Indian-born American economist who, with Esther Duflo and Michael Kremer, was awarded the 2019 Nobel Prize for Economics (the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) for helping to develop an innovative experimental approach to alleviating global poverty. Banerjee, Duflo, and Kremer, often working with each other, focused on relatively small and specific problems that contributed to poverty and identified the best solutions through carefully designed field experiments, which they conducted in several low- and middle-income countries over the course of more than two decades. They also explored methods for generalizing the results of particular experiments to larger populations, different geographic regions, and different implementing authorities (e.g., nongovernmental organizations [NGOs] and local or national governments), among other variables. Their fieldwork led to successful public policy recommendations and transformed the field of development economics (see economic development), where their approach and methods became standard.

Banerjee studied economics at the University of Calcutta (B.Sc. 1981), Jawaharlal Nehru University (M.A. 1983), and Harvard University (Ph.D. 1988). He taught economics at Princeton University from 1988 to 1992, at Harvard in 1991 and 1992–93, and at the Massachusetts Institute of Technology (MIT) from 1993. At MIT he was eventually (2003) appointed Ford Foundation International Professor of Economics. In 2003 he and Duflo, along with Sendhil Mullainathan, an economist at MIT, founded the Abdul Latif Jameel Poverty Action Lab (J-PAL), a research centre supporting scientifically informed policy making to reduce global poverty. Banerjee and Duflo were married in 2015.

Banerjee, Duflo, and Kremer applied their experimental approach in many areas, including education, health and medicine, access to credit, and the adoption of new technologies. Building on the results of field experiments conducted in the mid-1990s by Kremer and his colleagues, which had shown that poor learning (as measured by average test scores) among schoolchildren in western Kenya was not caused by scarcity of textbooks or even by hunger (many students went to school without breakfast), Banerjee and Duflo tested the hypothesis that learning could be improved by implementing remedial tutoring and computer-assisted learning programs to address the needs of weaker students. Working with large student populations in two Indian cities over a two-year period, they found that such programs had substantial positive effects in the short and medium term, leading them to conclude that a major cause of poor learning in low-income countries was that teaching methods were not properly adapted to students’ needs. In later experimental research in Kenya, Duflo and Kremer determined that decreasing the size of classes taught by permanently employed teachers did not significantly improve learning but that putting teachers on short-term contracts, which were renewed only if the teacher achieved good results, did have beneficial effects. They also showed that tracking (dividing students into groups based on prior achievement) and incentives to combat teacher absenteeism, a significant problem in low-income countries, also positively affected learning. The latter finding was further supported in studies by Banerjee and Duflo in India.

In the area of health and medicine, Banerjee and Duflo tested the hypothesis that introducing mobile clinics would significantly boost child-vaccination rates (the percentage of children who were fully immunized) in India—where, as in other low-income countries, high rates of health-worker absenteeism and poor service quality at stationary health centres, among other factors, had long discouraged the use of preventive medicines by poor families. They found that vaccination rates in villages that had been randomly selected to receive visits by mobile clinics were three times greater than rates in villages that had not been selected and that vaccination rates increased by more than six times if families were given a bag of lentils with each immunization.

Banerjee and Duflo also used field experiments in the Indian city of Hyderabad to test the effectiveness of microcredit loan programs in promoting economic growth and development. The somewhat unexpected results indicated that such programs did not significantly increase small-business investment or profitability and did not improve other indicators of economic growth and development such as per capita consumption, health, and children’s education. Later studies of several low- and middle-income countries by other researchers confirmed those results.

Work by Banerjee, Duflo, and Kremer directly and indirectly influenced national and international policy making in beneficial ways. Banerjee and Duflo’s studies of remedial tutoring and computer-assisted learning in India, for example, led to large-scale programs that affected more than five million Indian schoolchildren. According to J-PAL, programs that were implemented following studies by researchers associated with the centre, including Kremer, have reached more than 400 million people. The laureates’ experimental approach also inspired both public and private organizations to systematically evaluate their anti-poverty programs, sometimes on the basis of their own fieldwork, and to drop those that proved to be ineffective.