Simon Kuznets

In 1929, Kuznets married Edith Handler, a Russian-Canadian Jew. They had two children; Paul and Judith and from them, four grandchildren. Later Paul became a Professor of Economics at the University of Indiana while Judith married a Professor of Mathematics at the University of Rochester.

Although he brought up his children strictly in secular American manner, he retained a personal interest in the affairs of Soviet Russia and was a great opponent of the communist regime there. He was also an avid reader of Russian literature and like most other Jews was highly affected by the Holocaust.

Towards the end of his career, he set up his home in Cambridge, Massachusetts and died there on July 8, 1985. He was then 84 years old.

Simon Kuznets was born on April 30, 1901 in the city of Pinsk, then under the Russian Empire. Not much is known about Simon’s parents except that his father was a banker and that they had three sons, out of which Simon was born second.

Simon began his primary education in Pinsk. Later at the age of nine or ten, he moved with his family to Rovno in Eastern Ukraine, also a part of Russian Empire. There they lived with his mother’s family, who were well-to-do furriers there.

In Rovno, he was enrolled at the secondary school. Concurrently, he received his training in Judaism and Jewish history from his grandparents. Thus he was raised in mixture secular and Jewish heritage.

Sometime before the start of the First World War, his father and older brother migrated to the United States while he and his younger brother stayed back with their invalid mother. In the USA, his father changed his surname to Smith; however Simon never took it up.

Meanwhile in Ukraine, due to Jewish expulsion, the family was forced to leave Rovno. They now settled in Kharkiv/Kharkov, located in Western Ukraine, then a part of Austro-Hungarian Empire.

In 1927, Simon Kuznets began his career as a member of research staff at the National Bureau of Economic Research (NBER), a private nonprofit research organization, co-founded by his doctoral advisor Wesley Clair Mitchell. He remained associated with the institution till 1961.

At NBER, he continued to expand on his doctoral dissertation, basing his work on the long series of economic dynamics undertaken in the USA in the middle of 1920s. In 1930, he published the result as ‘Secular Movements in Production and Prices: Their Nature and Their Bearing upon Cyclical Fluctuations’.

In 1931, Kuznets became in charge of National Bureau’s work on national income accounts. In the same year, he was appointed a part-time professor at the University of Pennsylvania. From now until 1961, he would hold his teaching posts simultaneously with his research job at NBER.

Continuing his research on national income at NBER, Kuznets submitted a comprehensive report in 1934. He first provided an assessment of the national income in the US for the period of 1929 to 1932. Later it was extended from 1919 to 1938 and finally to 1869.

On analyzing them meticulously, he identified certain medium-range economic waves, spanning a period of 15 to 25 years. Thereafter, he connected them with demographic processes, especially with the inflow and outflow of the immigrants and their effect in construction business.

Simon Kuznets is best known for his studies of national income and its components. Prior to his work, GDP was determined mostly by rough guesses with neither the government agencies nor the private researchers collecting the data so meticulously.

Starting his work in 1931, he computed national income back to 1869 and then broke it down first by industries, then by final products and finally by use. He also worked on the distribution of income between rich and poor. The work, which spanned for almost a decade, later became a standard in this field.