Schultz, Theodore W. (Theodore William), 1902-1998

Theodore W. Schultz (1902–1998) was an influential economist known for his work on human capital and agricultural economics. Born on April 30, 1902, in Arlington, South Dakota, he was the eldest of eight children. Due to labor shortages during World War I, he worked on the family farm instead of attending high school. The agricultural depression of the 1920s motivated him to study the economic factors affecting farmers. He earned a bachelor’s degree in economics from South Dakota State University in 1926 and went on to the University of Wisconsin, where he completed his master’s and doctoral degrees in 1930.

Schultz began his teaching career in agricultural economics at Iowa State University, later becoming head of the Department of Economic Sociology. During World War II, he and his colleagues produced reports on government policies affecting agriculture. One controversial report recommended substituting margarine for butter, leading to opposition from the Iowa dairy industry and college administration. In 1943, Schultz successfully fought against censorship but resigned in protest along with several colleagues. He then joined the University of Chicago, where he became department chairman and played a key role in establishing Chicago as a center for economic innovation. In 1952, he was named a Charles L. Hutchinson Distinguished Service Professor, a position he held until retiring as emeritus professor in 1972.

Schultz pioneered the concept of human capital, arguing that investment in education and skills enhances economic productivity. He also challenged traditional views on agriculture, emphasizing its role in economic development beyond just food production. In 1979, he was awarded the Nobel Prize in Economics, shared with Arthur Lewis, for his groundbreaking research on economic development and human capital. He also received the Francis A. Walker Medal in 1972, a prestigious honor given by the American Economic Association every five years. Schultz authored and edited numerous books and served as an adviser to major foundations, federal agencies, the White House, and the military. He received five honorary doctorates, including one from South Dakota State University.

Schultz married Esther Werth, a fellow South Dakota native and SDSU graduate. They had two daughters, Elaine and Margaret, and one son, T. Paul. Though he formally retired in 1972, he remained active in research until 1990, when a hip fracture left him bedridden. He passed away on February 26, 1998, in Evanston, Illinois, due to complications from pneumonia.