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Updated: Oct 14, 2019 21:20 IST

Rewarding their work that has helped to fight poverty and also changed the lives of millions of children globally, the Stockholm-based Nobel Foundation awarded Indian American economist Abhijit Banerjee, his wife Esther Duflo and Michael Kremer with this year’s Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel, the founder of the prize.

Banerjee, Esther Duflo and Michael Kremer bagged the award for their “experimental approach to alleviating global poverty”.

After winning the coveted prize, French-American Duflo has become the second female economics winner in the 50-year history of the Nobel Prize for Economics. At 46, she is also the youngest recipient.

In India, Banerjee’s groundbreaking work on education in low-income countries has changed the lives of lakhs of children studying in Delhi government schools. Soon after the prize was announced, Delhi chief minister Arvind Kejriwal was among the first few political leaders to laud Banerjee’s work.

“Abhijit Banerjee’s pathbreaking work has benefitted lakhs of children studying in Delhi government schools. One of Delhi government’s most important educational reforms ‘Chunauti’ has transformed classroom teaching in government schools. It is based on the model developed by him,” Kejriwal wrote on micro-blogging platform Twitter.

A joint study by the economists has indicated that targeted support for weak pupils in low-income countries had strong positive effects, even in the medium term.

They found that students who had teachers on short-term contracts had significantly better test results when compared to the system of having fewer students per permanently employed teacher.

Banerjee’s work also revealed that improving school governance and demanding responsibility and accountability from teachers who are not doing their job are also cost-effective measures.

The Nobel laureate and his fellow awardees have also worked extensively on whether healthcare should be charged and, if so, how much should it cost in low-income countries.

A field experiment by Kremer and his co-author investigated how the demand for deworming pills for parasitic infections was affected by high costs. They found that 75 per cent of parents gave their children these pills when the medicine was free, compared to another 18 per cent when they cost less than a US dollar, which is still a heavily subsidised amount. The deworming studies not only showed that deworming provided health benefits for schoolchildren, but also that parents are extremely price-sensitive.

Banerjee and his co-workers, through extensive research also arrived at similar conclusions indicating that in most countries poor people are extremely price-sensitive regarding investments in preventive healthcare.

Based on the results of these experiments by the prize-winning economists, the World Health Organisation (WHO) has recommended that medicine should be distributed free-of-cost to over 800 million schoolchildren living in areas where more than 20 per cent of them have a specific type of parasitic worm infection.

Going forward, Banerjee, his wife Duflo and friend Kremer also worked on whether mobile vaccination clinics with hands on staff could fix this problem. Vaccination rates tripled to 18 per cent as compared to an earlier 6 per cent in the villages that were randomly selected to have access to these clinics.

They found that the vaccination rate increased to 39 per cent, if families received a bag of lentils as an incentive when they vaccinated their children. Since the mobile clinics had a high level of fixed costs, the total cost per individual vaccination actually went down by 50% despite the extra cost of the lentils as incentive.

Banerjee’s work has had visible results in shaping policies of several low-income countries and the studies the team of economists have carried out in remedial tutoring have provided the basis for large-scale support programmes that have currently reached more than five million children in India.