What’s it like to win a Nobel Prize?

SW: That was the moment at two in the morning, Californian time, when US academic Robert Wilson had to rouse his sleeping neighbour and Stanford University colleague Paul Milgrom to deliver the news that the two had just won the 2020 Nobel Prize for economics. A moment preserved for us all to enjoy on Paul’s doorcam.

Although there are many rumours every year, there’s no short-list, for the Nobel prizes so it always comes as a surprise for those who win what is one of the most globally revered academic awards.

The Nobel Prizes were established in 1900 at the behest of Alfred Nobel, a Swedish Chemist, Inventor and Industrialist, known in particular for his invention of dynamite. In his will he stated that his fortune was to be used to reward those who have made the most significant contributions to humanity. The prizes would recognise achievements in physics, chemistry, physiology or medicine, literature and peace. The prize for economics would come much later in 1968.

The prizes are awarded in October every year.

Welcome to LSE iQ, the podcast where we ask social scientists and other experts to answer one intelligent question. I’m Sue Windebank. ...

CK: And I’m Charlotte Kelloway. We’re from the iQ team where we work with academics to bring you their latest research and ideas, and talk to people affected by the issues we explore.

In this episode, we’ll be pulling back the curtain and asking, ‘What’s it like to win a Nobel Prize?’

We’ll find out what it’s like to get that all important call from The Royal Swedish Academy of Sciences – the organisation responsible for selecting the Laureates in Economic Sciences.

Does a Nobel prize change your life? Two winners talk about the reality of life after the prize.

And we’ll hear what it’s like when it’s your Dad that wins the Nobel Prize.

SW: Sir Christopher Pissarides, Regius Professor of Economics at LSE, won his Nobel prize in economics in 2010. He was recognised along with Peter Diamond from MIT and Dale Mortensen from Northwestern University. The prize recognised their work on the economics of unemployment, especially job flows and the effects of being out of work. I asked him how he found out that he had won a Nobel.

CP: Well, of course memories are very vivid still of that day. The way you find out is that you get a call about an hour before the public announcement is made. And I remember it was a Monday. Economics is always given on a Monday, and it somehow didn't cross my mind that it was the day that the economics Nobel Prizes were going to be announced. I remember I had a cold, not a very, very serious one, but I didn't have teaching at university so I thought, "Oh, I'll stay home." I would not answer the phone. I would just take it easy and recover.

..... And then when the phone rang, my mobile rang about 11:00 in the morning. I thought out of curiosity, I would look. "Who's calling you?" And I saw that it was an international number and the code I vaguely recognized as being Sweden. And I thought, "Oh, wait." And then suddenly it dawned on me, "Oh," I thought. So I answered the phone and he said, "Oh, hello, is that Christopher Pissarides?" I said, "Yes." He said, "You have a very important phone call from Sweden. Can you take it? Are you in a private place?" I said, "Yes, it couldn't be more private. I'm alone at home."

...

....obviously, Nobel Prize is the biggest scientific prize so you would think that at least people outside think that Nobel Prize winners would be so serious. They're told about the prize, they take it in their stride or seriously. But in fact, it's exactly the opposite. You start thinking more superficial, silly things, if you like. In fact, my thought was that I should keep quiet until she finishes talking at least. And then, "Oh my God, I hope I don't say something silly and they say, 'Sorry, we changed our mind.'"

SW:

Well, I actually have a shared memory of that day with you because I was working in the LSE press office and we were watching the announcements.

CP:

Oh, okay.

SW:

And then your name was announced.

Christopher Pissarides:

Yes.

SW:

And we were just so surprised that it was an LSE winner and we were so excited. And then our next thought was, "Where is he? We don't know where he is." Because there's no shortlist for a Nobel Prize.

CP:

No, no there isn't.

SW: So you never know, when it might be you.

CP: Yes. In fact, I got a phone call from the LSE saying, "Come immediately, there's a press conference for you to get." I thought, "Oh, I stayed home because I wasn't feeling well." "No, no, you must come now." So I quickly put on a suit and came straight here.

......

SW:

Yes, I do remember you being powered by Lemsip that day.

CP:

Yes, exactly.

CK: Of course, nobody expects a Nobel Prize. And so Esther Duflo, Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT was also taken by surprise when she got the call telling her that she had, at 46, become the youngest winner of a Nobel Prize for Economics - an award she shares with her husband Abhijit Banerjee also from MIT, along with Michael Kremer who was at Harvard University at the time. Here she is, telling me how it happened in October 2019.

ED:

Well, that was actually the middle of the night because we are in Boston. They called us I think in Boston. It was about three or four in the morning. Of course when you get a phone call from Europe at three or four in the morning, the first worry is that, oh my god, what is going on with my parents and so on. It was very doubly welcome to hear that it was the news they wanted to share. They first called me and they said, "We want to inform you won the Nobel Prize."

My first question was with whom? Then since they said with Abhijit Banerjee. I said, "Okay, I'll give him the phone." Then the president of the Academy of Science told me, "Okay, you have to get up, shower, get a good cup of tea because at six you have a press conference, 6:00 AM Boston time." I said, "Okay." Abhijit looked at me and said, "I'm going back to sleep." I was like, "What? We just want a Nobel Prize." He tells me, "It's going to be a long day."

He went back to sleep and I got up and I took a shower and got some tea and then got ready for the press conference. Then the day was pretty quick after that. Immediately after that we got deluge by emails and MIT wanted to organize a press conference. I'm like, "Yes, I can do a press conference, but not at the time you said, because my daughter has a concert. She has a small concert with her chorus, so I have to be with her at her concert." They kindly changed the press conference time. Then we had a party and after that it launched a big weird world event for the next few weeks.

SW: Of course, winning a Nobel is the culmination of years of work. For Christopher Pissarides, his interest in unemployment goes back to his PhD thesis in the 1970s, when joblessness was increasing. At the time there was no convincing explanation in economics as to why there were people who wanted jobs but couldn’t get them even though companies were hiring.

CP: .....there are many issues that economic theories had preexisted in terms of companies that want to hire workers and workers who want jobs, so the two come together and you have a demand curve and a supply curve and the two intersect and the middle will give you where the labor market is going to be. It's a nice, simplistic model for the first two months that you're studying economics, but from then on, it's nice as a foundation, if you like, of what is coming next.

Whereas when we think about the labor market in practice, what do we do? When we want is to get a job, we don't jump into the first job that we find. We look at many jobs, we compare them, we talk to people who know more. We gather information about these jobs....

And at the same time, when the employer is looking for workers, they would ask, "Is this worker good for what I'm looking for? Are they motivated? Do they like to come and work for me?"

.... These processes are information gathering. And when both sides agree that they would be good together, they're going to give you something productive, they come together. And that's basically the idea of how the labor market works. In my model, I call that matching. When you match employers with workers, and the process of looking for one another, I call the job search, you're searching for information....

... I remember people asking me, "So what's your big idea?" And I said, "Oh, my big idea is that when people want a job, then they spend some time looking for one," and they're saying, "Is that all? They gave you a job at the The London School of Economics because of that?"

SW: I'm sure it's a bit more complicated than that.

CP: Yes. And if I say a little bit immodestly, my big discovery as it were that opened up theory and enabled other economies to use it as well, is to find a mathematical relationship, which I call the function, a functional form, that tells you how many successful meetings between employers and employee and potential employees will be to give you the outcome of this matching process. So if there's any word in economics, if you like, in labor economics, at least not whole economics, associated with my name, it would be the word matching where you match one with the other, which didn't exist in economics before I and other people, obviously my co-winners, those I shared the prize with, had similar ideas but completely independently.

SW: Chris looked at what happens when people lose their jobs due to shifts in the economy. He developed a model to analyze the various processes and decisions—like government policies—that influence how long it takes for someone to get back into meaningful work. One of his key findings is that it’s crucial to prevent long periods of unemployment. The longer someone is out of work, the harder it becomes for them to re-enter the job market and find steady employment again.

CK: Esther Duflo and her co-winners were awarded the Nobel Prize for "for their experimental approach to alleviating global poverty". They transformed the field of economics by using "randomized control trials" to figure out what kinds of interventions actually improve people’s lives. Just like in medical research, these trials randomly assign participants to either an experimental group or a control group, allowing researchers to compare the outcomes and see which strategies really make a difference.

ED: ..... The idea is that to know what works and what doesn't work in social policy, we don't have to use guesswork. We can really use methods that are the same than the method that are used in medical science. Because basically what you want to know when you're a particular policy, what would've happened if that policy had not taken place? Or if you look at a particular program or an intervention, what would happen if the world had been different?

But you'd never observe the same person with and without the new policy. In the same way that when you're trying to test a new drug, you never observe the person with the drug and without the drug. The way this is solved for medical research is to create randomized control trials. You take a group of people sufficiently large and you randomly select, let's say half of them, and you give them the new drug and the other half gets the standard of care.

It wasn't done that often or maybe close to never in social policy or in development economics until Michael Cameron really and Abhijit Banerjee started experimenting with it. There were some examples of randomized control trial in US social policy, but few and far between. There is really no reason. In fact, it's really important to use that. Because in the absence of this randomized control trials, if you're trying to look at the impact say, of providing textbooks in school.

You never know whether the results are different in the schools that have the textbook and the schools that don't because the schools are different for some other reason. The randomized control trials solve this fundamental data problem, and it's a powerful tool that can be used across many, many sectors and many, many geography and teaches some very solid lessons that we can move forward from.

CK: Esther and her husband have used Randomised Control Trials to help tackle the problems of poverty by breaking them down into manageable questions, such as how to increase immunization rates, whether charging for bed nets makes people more likely to use them to prevent malaria and what strategies work best to keep children in school longer.

SW: Some nobel prizes winners are distinguished not only by their research but also by what they represent. Esther, was not only the youngest winner of the Nobel prize for Economics, she was only the second woman to win it.

Another groundbreaking nobel-winning academic considered to be one of the founders of development economics was Sir Arthur Lewis a St Lucian and the first – and so far only – black winner of the Nobel prize in economics.

Sir Arthur died in 1991, but his daughter Elizabeth Lewis Channon was kind enough to talk to me along with her nephew- in- law Khari Motayne. Elizabeth describes her father as a man who was intensely interested in his work.

EL:

He was quiet, he was interested in a lot of things, but he basically had one topic of conversation and that was economics. Fortunately, it's a relatively broad field, especially development economics, which is what he was helping found.

...

I just grew up knowing that if I wanted to talk to my father, the easiest way was to read the Economist and then there would be all kinds of things we could talk about.

....

He was very intelligent, very bright, genius, probably had a photographic memory or something like that. He taught himself all kinds of things.

...he taught himself German, how to read it, speak it, and other things that he, French obviously because back in the day, French was a diplomatic language.

SW Bridge: Sir Arthur Lewis was a student at LSE from 1934 to 1937, and a member of staff from 1938 to 1948. In 1948 he joined Manchester University becoming Britain’s first black professor.

In 1979 he was awarded the Nobel prize jointly with Theodore W. Schultz "for their pioneering research into economic development research with particular consideration of the problems of developing countries"

Elizabeth explained some of her father’s foundational research.

EL: ....he realized that the economies of the world, particularly of the developing countries, had unlimited resource in terms of labor. All of the models until then had been looking more at the industrialized countries where the labor pool was reasonably fixed and

he realized when you're talking about developing countries the labor is essentially unlimited there is always somebody else who wants a job so...

The supply of labor did not fix the price for labor. It wasn't a resource that you can see scarcity happening in. The way you might with the other materials and things like that.

And that changed the whole way that you look at, well, how are we going to develop these countries?

it, when he went to college there was no such thing as development economics to study. He ended up being one of the founders of that branch.

KM:

.... last year when we visited the LSE, think what was quite moving was seeing how much of his academia is still featured as foundational coursework for the LSE when you're talking about developmental economics.

SW: Sir Arthur Lewis’ Nobel developed two influential models to explain the challenges of underdevelopment. His most famous theory, known as the ‘Lewis model,’ explores how countries can transform from agrarian, or farming-based, economies into industrial ones—a crucial shift for raising incomes and reducing poverty.

Lewis outlined that if both the government and private sector invested in industrialization, something interesting would happen. As people moved from the countryside into the cities for factory jobs, wages would stay low for a while. This would allow businesses to enjoy high profits, which they could then reinvest to expand the industrial sector even further. As more people left rural areas for urban jobs, this cycle of growth would continue.

At some point, though, you hit the so-called Lewisian "turning point." That’s when the supply of cheap labor from the countryside starts to dry up, and the economy begins to integrate into a more balanced, modern one, with higher wages and a more developed industrial base. This transformation is key to lifting countries out of poverty and building sustainable growth.

SW: Do have any memories of him winning the Nobel?

.... My sister and I went with him to Sweden for all of the ceremonies....

... there was a lot of pomp and circumstance,

..... And the Swedes really make an effort to make it memorable. Yes, they have to give a lecture.

After all this is an academic award at heart. academic slash humanitarian.

there's this huge dinner party with the king and queen. My dad was one of the speakers at it saying, give him thanks for the hospitality and all that.

....by the time the Nobel came round, he was near the end of his career. He was born in 1915, so by 79 he's pretty much done. And over the course of the years, he got knighted in 63, at which point he already had several honorary degrees. He had worked for the United Nations, helping, he had helped fund the UNDP, the development program. bringing it out of the Special Forces into its own program.

....He had started the transition of the University of the West Indies from a college of London to its own university. He had done all kinds of things. He had headed up the Caribbean Development Bank.

.....So by the time he gets to the Nobel, it's a crowning achievement, a lot of achievements.

SW: I asked Elizabeth and Khari about Sir Arthur’s legacay. Here’s Khari – he mentions Lady Gladys, Elizabeth’s mother and Sir Arthur’s wife who was a significant force in supporting her husband’s achievements.

KM: I think obviously Lady Gladys and Sir Arthur, their contributions are massive....

...I think that that generation in many ways did so much and so much that we're still, I feel like discovering today and rediscovering all of the different contributions that that they made

I think that from a legacy perspective, it's something that we definitely try and honor. You know, I think that across the board we're

We could definitely use more folks like that. I think that, Elizabeth always says this. think that, you know, he, the one thing that he probably would be, I guess somewhat disappointed is that he's remained the first and only. and I think that.

That's something that, you know, I'm hoping that from a legacy perspective, as we're pushing and honoring that legacy, that the next Sir Arthur is out there looking through and pushing that for those economic conversations and pushing the new wave. think that the global economy has changed so much in the past, you know, half decade that we're definitely going to need those new visionary academics to see the way forward for the developing world.

EL: He shows it can be done. I think often people get so caught up in the fact that you look and the only black people who get prizes get them in entertainment or the arts and literature and he broke the mold and he showed that you could.

there was nothing inherently about being black that stops you....

I think he would be surprised at how strong his legacy has remained because he was expecting others to build on it.

CK: While Sir Arthur won his Nobel at the end of his career, Esther Duflo is still very much in the midst of hers. She puts her achievements in the context of a wider movement – The Randomistas who champion the use of Random Controlled Trials in alleviating the challenges of poverty. I asked her how winning the Nobel has changed her life academically and otherwise.

ED: It's the poet Seamus Heaney who described it as a benign avalanche, uncalled-for, unexpected, and taking everything on its wake. For me, I don't know really. It's hard to distinguish what happened between the Nobel Prize and COVID because we got the Nobel Prize in the fall of 2019, and COVID happened in the very beginning of 2020. There's a before and after Nobel Prize, which coincides with before and after COVID. In many ways, the basic day-to-day work is the same.

We're still quite young and active and we have to do our research project and that continues. We have to teach students and we love doing that. The day-to-day of that doesn't really change. In other ways, of course, because we were already at the part of a movement. The way we described winning the prize is that it's not so much for us, but it's for an entire movement. Therefore, in winning the Nobel Prize, we feel responsible for sharing it with the movement, not just in term of giving credit, but also in term of whatever makes the movement grow faster.

That gives responsibility in term of presenting the work, sharing the work, making sure it has policy impact that maybe we had before, but not to that extent. At the same time, it also provides us with more tools and more people are more willing to listen to us and access is made easier, which we can also build upon to ensure that the movement thrives.

CK: You were the youngest person to win the prize in this area. Is there any advice you would give to other younger academics who want to make a change in the world?

ED:...the key, and it's going to sound very trite but let me say it anyways, is that you really have to do what seems important to you and feasible to you at a given point in time without worrying about the greater implication and will that ever win you a Nobel Prize or will that even be sufficient to finish your dissertation?

What I'm seeing with a lot of PhD students in particular is that they are concerned that their ideas are not good enough or I'm not big enough. I really went from one small idea to the next one. It's only over time that you realize that some of these ideas, I've had more echo than you thought. That maybe the collective together, all of this idea taken together as well as other people working in the same area, has created something that is very different, very powerful.

I think it's very difficult as an individual to understand the importance of what you do. You have just to assume that it's important to others if it's important to you and do it without so much looking what's the vision? Where is it leading me? In a way I am not someone who had a huge vision and yet a vision emerged in from the collective work effort.

SW: I asked Christopher Pissarides how the Nobel had changed his life, and like Esther he points out that the honour of the award brings responsibility.

CP: Well, you see, this is the thing that surprised me most, how your professional life changes. Your personal of course as well, because it was closely interconnected. Especially people outside academia starting looking at you and wanted to communicate with you in a different light than before. It's with another friend of mine, Michael Spence, also won the Nobel Prize for what you call the economic theory of signaling. It's as if you signal something. Here is an economist who can answer all the questions you have, which of course is completely false. And so the requests you get to meet people, give advice, talk to decision makers, get research funding for research that will lead to new policy initiatives....

Now in academia, the change is much less, of course. And if you said no to everything else, you could continue in exactly the same way. There is a change within the university.

They don't ask you to join every committee, for example, and they give you some administrative assistance as well to deal with all this flood of requests. But I do believe though that economics has something to offer through policy to influence policy in what we consider to be the right way, obviously, but it may or may not be, but at least we have something useful to say both to other companies, how they treat their workers, for example, or to policy makers, what policies will make a real change in society, especially now that the economists are looking more and more the economics of happiness, how to improve wellbeing at work. The current project I'm working on is on wellbeing at work. And we should be doing that. If people are prepared to listen to you much more than before the prize, then you should use it and talk to them and try and influence where you can in a way that would improve wellbeing and the standard of living of society. So I'm doing a lot of that kind of activity now than pure academic.

SW: what advice would you give to this year's winner of the Nobel Prize for economics?

CP: Step back a little bit and think. Now I've got a much bigger audience. I've got an audience that is influential in society and in policy and I'm in a position where I could influence decision making. You don't know how much, depends how convincing you are, what you say. So just focus on the important things that are going to make a difference, not on things that might be easier and you say the same thing all the time and suddenly, you start earning more than before....

We've got something good to offer, I believe, as economists. I believe in the power of economics to improve the conditions of society. So use it. If you have the ability to go as far as a Nobel Prize, at least make some use of it. You have social responsibilities.

CK: This episode was produced by Charlotte Kelloway and Sue Windebank with help from Sophie Mallet and edited by Oliver Johnson. If you’d like to find out more about the research in this episode, head to the show note notes. And if you enjoy iQ, please leave us a review.

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