Thaler was born in
East Orange, New Jersey. His mother, Roslyn (Melnikoff), was a teacher, and his father, Alan M. Thaler, was an actuary at the
Prudential Financial in
Newark, New Jersey,
 and was born in
 His family is Jewish,
 and he grew up with two younger brothers.
 He is married to France Leclerc, a former marketing professor. He has three children from his first marriage.
He graduated from
 before going on to the receive his
Bachelor of Arts in 1967 from
Case Western Reserve University,
 and his master's in 1970 and doctorate in 1974 from the
University of Rochester, writing his thesis on "The Value of Saving A Life: A Market Estimate" under the supervision of
After completing his studies, he began his career as a professor at the University of Rochester.
 From 1978 to 1995, he was a faculty member at the
SC Johnson College of Business at
Cornell University and then at the
University of Chicago's
Booth School of Business in 1995.
 Since 1999, he has been the Principal of the Fuller & Thaler Asset Management, which he co-founded in 1993.
 He has also been the co-director of the
National Bureau of Economic Research Behavioral Economics Project since 1991.