Michael Spence facts for kids
Quick facts for kids
Michael Spence
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Spence in 2008
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| Born | November 7, 1943 Montclair, New Jersey, US
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| Institution | Harvard University Stanford University SDA Bocconi School of Management New York University |
| Field | Microeconomics, labor economics |
| Alma mater | Harvard University, (Ph.D.) University of Oxford, (B.A.) Princeton University, (B.A.) |
| Doctoral advisor |
Kenneth Arrow Thomas Schelling |
| Influences | Richard Zeckhauser |
| Contributions | Signaling theory |
| Awards | John Bates Clark Medal (1981) Nobel Memorial Prize in Economics (2001) |
| Information at IDEAS / RePEc | |
Andrew Michael Spence (born November 7, 1943) is a famous Canadian-American economist. He won the Nobel Memorial Prize in Economic Sciences in 2001 for his groundbreaking ideas.
Spence is known for his work on how people share information in markets. He has taught at some of the world's top universities, including New York University and Stanford University.
He shared his Nobel Prize with two other economists, George A. Akerlof and Joseph E. Stiglitz. They were honored for their work on "markets with asymmetric information." This is when one person in a deal knows more than the other person.
Contents
A Nobel-Winning Idea
Spence's most famous idea is about "signaling" in the job market. This idea helped create a whole new area of study in economics.
What is Market Signaling?
Imagine you are an employer trying to hire someone. It's hard to know who is a hardworking and skilled person just from an interview. Spence's theory explains how people can "signal" their abilities.
He used education as an example. Getting a college degree is difficult and takes a lot of effort. By earning a degree, a person sends a signal to employers that they are capable and determined.
Employers are often willing to pay higher salaries to people with degrees. They believe that educated people are more likely to have high abilities. This is because it's easier for a high-ability person to succeed in college than it is for someone with lower abilities.
Interestingly, Spence's model shows that the signal works even if the education itself doesn't teach specific job skills. As long as getting the signal (the degree) is costly and difficult, it can still show an employer that the person is a good candidate.
Life and Education
Michael Spence received his early education at the University of Toronto Schools. He later returned to the University of Toronto to help advise the business school there.
Studying Around the World
For college, Spence went to Princeton University. He studied philosophy and graduated in 1966 with the highest honors.
After Princeton, he won a special Rhodes Scholarship to study at the University of Oxford in England. There, he earned a degree in mathematics in 1968.
He then moved to Harvard University to study economics. He earned his Ph.D. in 1972. His final research paper, called a dissertation, was on his idea of "market signalling." It was so good that it won a prize for being the best dissertation at Harvard that year.
A Career in Teaching and Research
Spence became a professor and taught at top universities like Harvard and Stanford. For a while, he was the Dean of the Stanford Graduate School of Business. A dean is like the principal of a specific school within a university.
In 2010, he joined the faculty at New York University's Stern School of Business. He also teaches at the SDA Bocconi School of Management in Italy.
He is a senior fellow at Stanford University's Hoover Institution. This means he is a respected expert who continues to do research there.
A Teacher to Tech Giants
Spence had some very famous students in one of his economics classes at Harvard. Two of them were Bill Gates and Steve Ballmer, who would later lead the giant tech company Microsoft.
In an interview years later, Gates and Ballmer admitted they didn't always go to class. They said they only passed the final exam after studying very hard for four days straight.
Honors and Awards
For his important work, Michael Spence has received many awards.
- In 1981, he won the John Bates Clark Medal. This award is given to the most influential American economist under the age of forty.
- In 2001, he received the Nobel Memorial Prize in Economic Sciences, the highest honor in economics.
He is also an Honorary Fellow of Magdalen College, Oxford, which is a special honor from the college where he once studied.
Personal Life
Michael Spence currently lives in Milan, Italy, with his wife and children.
See also
In Spanish: Michael Spence para niños
- List of economists
