This year, the Nobel Prize for Economics has been awarded to three pioneers in the fight against poverty: Esther Duflo, Abhijit Banerjee, and Michael Kremer.

The recipients of the prestigious award were announced by the Royal Swedish Academy of Sciences on Monday morning in Stockholm.

The economics prize — officially known as the Sveriges Riksbank Prize — was awarded to the three academics for their work, which has “dramatically improved our ability to fight poverty in practice,” according to the Academy. 

"In just two decades, their new experiment-based approach has transformed development economics, which is now a flourishing field of research," the Academy added.

The announcement means that Duflo, at age 46, has now become the youngest recipient of the award ever — replacing economist Kenneth Arrow, who was awarded the prize at age 51. 

It’s also only the second time in history that a woman has received the prize — with US professor Elinor Ostom being the only female winner previously — and she said afterwards that she hopes her success will inspire other women and girls too. 

“Showing that it is possible for a woman to success and be recognised by success I hope is going to inspire many, many other women to continue working and many other men to give them the respect they deserve,” she told reporters.

The high-profile announcement will also highlight the importance of innovation in the fight against extreme poverty, with the economics being honoured for their “experimental approach to tackling global poverty,” according to the Academy’s statement. 

The United Nations’ Global Goals aims to have ended poverty by 2030. Yet, worldwide, 3.4 billion people live below the poverty line, according to a World Bank report published last year. It means that these people struggle to meet basic needs — living on less than $3.20 per day in lower-middle income countries, and less than $5.50 a day in upper-middle income countries. 

Meanwhile, more than 700 million people are living in extreme poverty — which means they live on less than $1.90 a day. 

Monday’s prize announcement highlights the importance of identifying practical solutions, and conducting field trials for these solutions.

Duflo further said that the trio were committed to ensuring the “fight against poverty is based on scientific evidence.” 

“Poor people are supposed to be either completely stupid, desperate, lazy, or entrepreneurial,” she said. “But we don’t try to understand the deep root, the interconnected root of the problem.”

“So what we try to do in our work is unpack the problems one by one to better understand the reasons for particular problems,” she continued. “What works, what doesn’t work, and why.” 

According to the Academy, just one practical example of the impact of the trio’s research is that more than 5 million children in India have benefitted from programmes of remedial tutoring in schools.” 

While Duflo has French and US citizenship, Banerjee — who’s also her husband — was born in Kolkata, in India. Together, they founded MIT's Abdul Latif Jameel Poverty Action Lab (J-PAL), an international research center that aims to reduce poverty through successful development cooperation measures. 

The three recipients of the award all teach at universities in the US — Banerjee and Duflo at the prestigious Massachusetts Institute of Technology (MIT), and Michael Kremer at Harvard University. 

The economics prize is also the only Nobel Prize that wasn't created by inventor Alfred Nobel. Instead, it has been donated since 1969 by Sweden’s central bank, Riksbank. 

Nevertheless, as with the other Nobel prizes, recipients are awarded 9 million Swedish kronor ($915,000), and will be presented with their awards alongside the other Nobel prize winners on Dec. 10. 

Last year, US economists William Nordhaus and Paul Romer received the award for their work on climate change and technological innovation.