Banerjee was born to a Maharashtrian-Konkani mother and a Bengali father—both of whom taught economics in Kolkata. While Nirmala Banerjee (nee Patankar) taught economics at the Centre for Studies in Social Sciences, Calcutta, Dipak Banerjee was professor and head of the department of economics at the Presidency College, Kolkata.

Banerjee is presently the Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology, USA. He earlier taught at the Harvard University and at the Princeton University, both in the USA. Duflo, his wife since 2015, is professor of poverty alleviation and development economics at MIT.

The Nobel Prize itself is bestowed by Swedish and Norwegian institutions in recognition of advances made in academic, cultural and scientific fields. Five Nobel prizes were established in 1895 in chemistry, literature, peace, physics, and physiology or medicine through the will of the Swedish chemist, engineer and industrialist Alfred Nobel. The prizes were first awarded in 1901. In 1968, Sveriges Riksbank, Sweden’s central bank, started the prize in economic sciences.