American economic historian Claudia Goldin has won the Nobel Memorial Prize in Economic Sciences.

The committee awarding her the prize, officially known as the Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel, said Goldin "provided the first comprehensive account of women’s earnings and labour market outcomes throughout the centuries".

Based at Harvard University, Goldin is regarded as one of the principal experts in the world on the gender gap in labor economics. She is just the third woman to win the prize, Elinor Ostrom in 2009 and Esther Duflo in 2019. 

Simon Jäger, director of the Institute for the Future of Work (IZA) in Bonn knows Goldin from his time studying for a doctorate at Harvard University. "She is a very special researcher and a very special person," he told DW. He said the award was "well-deserved" for an "outstanding" researcher and academic.

The prize is arguably the most prestigious award in the field of economics. Among the list of its 92 previous winners (known as laureates) are some of the most influential and best-known economists of the last century.

Last year, the prize was divided equally between three American economists Ben Bernanke, Douglas Diamond and Philip Dybvig for their research on banks and financial crises.

Yet the prize has not been without controversy. From the dispute over its validity as a Nobel Prize, to various disagreements over some of the winners, it has been a source of considerable contention.

Where does the economics award fit in?

The Nobel Prizes are five separate prizes that were set out in the 1895 will of Alfred Nobel, a Swedish engineer and inventor widely known for creating dynamite.

The original five prizes, in the fields of physics, chemistry, physiology or medicine, literature and peace are to be awarded to, in Nobel's words, "those who, during the preceding year, have conferred the greatest benefit to humankind."

The economics prize was added in 1968, more than 70 years after Nobel's death, by the Swedish central bank. The bank funded the establishment of the award, which is administered by the Nobel Foundation and given "in memory of Alfred Nobel."  

Why is it controversial?

Due to the fact that the economics prize was not part of Nobel's original intention, many critics say it should not be counted as a Nobel and that its prestige is not justified.

The Nobel Foundation itself could not be clearer in stating that the economics prize is not actually a Nobel Prize. "The prize in economic sciences is not a Nobel Prize," it says on the official Nobel Prize website.

A prominent critic of the award is Peter Nobel, a descendant of Alfred's brother Ludvig Nobel. In 2005, he said of Alfred Nobel that "there is nothing to indicate that he would have wanted such a prize" and said it was regularly awarded to "stock market speculators," which, in his view, went against Nobel's humanitarian ideals.

"The economics prize has nestled itself in and is awarded as if it were a Nobel Prize. But it's a PR coup by economists to improve their reputation," he said.

Some Swedish politicians have argued for the abolition of the prize while some laureates themselves have said the prize should not be granted. When Friedrich Hayek won the award in 1974, he said in his banquet speech that "the Nobel Prize confers on an individual an authority which in economics no man ought to possess."

What about controversial winners?

When the American economist Milton Friedman won the prize in 1976, it led to significant international protests because he was accused of being too close to the military dictatorship of Augusto Pinochet in Chile at the time.

Another controversial winner was 1994 laureate John Forbes Nash, the subject of the 1998 film "A Beautiful Mind," starring Russell Crowe. Nash had been accused of anti-Semitism and had a history of erratic behavior related to his history of mental illness.

Who decides who wins?

The Committee for the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, usually made up of at least five economists or professors, is appointed by the Royal Swedish Academy of Sciences. Its job is to consider nominations and propose a final list of potential winners each year.

The nomination process involves the committee sending confidential forms to "persons who are competent and qualified to nominate," according to its website.

These so-called "qualified nominators" include members of the selection committee itself, members of the Royal Swedish Academy of Sciences, former economics laureates, professors of relevant subjects at universities and colleges in Sweden, Denmark, Finland, Iceland and Norway and other selected individuals.

Information about who nominated which person cannot be released for 50 years. The final decision as to who wins the prize is made by the entire Royal Swedish Academy of Sciences, following recommendations by the committee.

Who usually wins and what does it mean?

As of the 2022 prize, 54 awards have been given out to a total of 92 people. Almost two-thirds — 61 laureates in total — are American, followed by a distant UK, France, Canada and Norway.

Awards have been given for a wide range of reasons, acknowledging multiple areas of economic research and theory.

In 2021, the economist Paul Krugman, who won the award himself in 2008, wrote in The New York Times: "Nobel Memorial Prizes in economics are given for long-term research, not for economists' role in current debates, so they don't necessarily have much bearing on the political moment."

The Nobel winner receives a gold medal, a diploma and a monetary prize. This year, the prizes, including the economics prize, are worth 11 million Swedish Krona (€948,000; $1,000,000) in each category. There is also the almost certain guarantee of lifelong acclaim.

Edited by: Tim Rooks