Larry Sjaastad, professor emeritus of economics and a leading expert on trade in Latin America, died May 2. A resident of Hyde Park, he was 77.
Sjaastad made fundamental contributions to economics across a wide spectrum of topics including public finance, international economics and exchange rate theory.
“Larry’s teaching and the bonds he made with students have had a huge effect in Latin America,” said Jorge Garcia-Garcia, PhD’75, a senior evaluation officer with The World Bank. “His students now occupy important positions in government and academia, and as a result, his ideas have had a larger effect in those countries,”
“A good example of the influence of his research was Larry’s famous ‘shift coefficient,’ the share of import protection born by the country’s own exporters,” said Kenneth Clements, PhD’77, professor of economics at the University of Western Australia. “This explained clearly why countries that tax imports tend to have languishing export sectors. Exporters in Latin America and Australia in the 1980s were quick to realize the significance of this research for them.”
Sjaastad helped organize the Latin American Workshops at the University of Chicago. As a young scholar he developed an interest in Latin America when he directed a training program started in 1962 for Argentinian students in economics that was organized at the Universidad National de Cuyo as a joint program with professors from the University of Chicago. It was the first such program established through President John F. Kennedy’s Alliance for Progress, which was intended to improve relations with Latin America.
He also was a visiting professor at universities in Chile, Colombia, Singapore, Western Australia and Brazil.
Sjaastad was born on a farm near Tagus, N.D. and enrolled in the North Dakota Agricultural College to study electrical engineering. He received a scholarship to attend UChicago, where he developed a passion for analytical, applied economics.
His publications in economics were significant from the beginning. After receiving his undergraduate degree in 1957, he continued as a graduate student in economics and received a PhD from UChicago in 1961. His doctoral thesis, a path-breaking extension of human capital theory into the study of migration decisions, was developed into an influential article, “The Costs and Returns of Human Migration,” which remains widely cited today.
The paper, published in the Journal of Political Economy, examined migration patterns in the United States in a comprehensive way. It sought to determine the social and personal costs of migration, in monetary and non-monetary terms, such as moving from to another state because of better living conditions.
The thesis also became legendary for students in UChicago’s Department of Economics.
“Larry's thesis on migration was held up by (former UChicago professor) Gregg Lewis and other teachers as a model dissertation for my class. It was a standard that few of us met,” said Nobel Prize winner Robert Lucas, the John Dewey Distinguished Service Professor in Economics at UChicago, who received a PhD from UChicago in 1964.
After briefly teaching at the University of Minnesota, Sjaastad in 1962 joined the UChicago faculty, where he remained until his retirement in 2004.
During his 42-year teaching career, Sjaastad supervised 139 doctoral dissertations and was a vital source of guidance and support for countless students. Known for his ability to present complex economic theory in a clear, accessible manner, Sjaastad set an example for excellence in teaching, former students said.
“He had a special gift of being able to understand people well and being able to help them, especially international students studying economics in the challenging intellectual environment that Chicago is so well known for,” Clements said,
In 2008, he received Norman Maclean Faculty Award, given by the University’s Alumni Association in recognition of his outstanding teaching.
When Sjaastad retired, he was presented with a work titled, “The Larry Sjaastad Letters,” which included expressions of gratitude and well wishes from former students, colleagues and friends. One former student eloquently summed up Sjaastad’s impact by urging him to “stick around because we are used to counting on you.”
He is survived by his wife, Irene Glasner; and sons, Michael and John Sjaastad.