James Heckman
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James Heckman (born April 19, 1944) is an economist at the University of Chicago. He was the winner of The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in 2000 for his pioneering work in econometrics and microeconomics.
Heckman began his career at Colorado College. Heckman then received his Ph.D. in economics from Princeton University in 1971, and served as an Assistant Professor at Columbia University before going to the University of Chicago.
Heckman is most famous for introducing the concept of "selection bias" into modern econometrics. The literature has always been complex, but the main idea is fairly simple. Economists routinely take data on wages to calculate average wages. Many subjects are unemployed, and thus would have missing wages. Before Heckman, economists would simply discard all records with missing wages and then calculate averages using the remaining observations. Heckman shows that this process can lead to selection bias because observations do not have missing wages at random. For instance, poorer individuals of one group may be unemployed more often, so average wages may be too high for this group. Thus, Heckman's work has persuaded economists to treat missing observations more carefully. He has also pioneered the application of economics to econometrics and has conducted numerous empirical studies.