Arie Kapteyn studied agricultural economics at Wageningen University and econometrics at Erasmus University, both in The Netherlands. He received his Ph.D. from Leyden University in 1977. He was an assistant professor at Leyden University between 1973 and 1978, an assistant professor and later associate professor at the University of Southern California from 1979 to 1981. Since 1982 he is a professor of econometrics at Tilburg University. He has held several visiting positions, including a fellowship of the Netherlands Institute for Advanced Study (NIAS) in 1976-1977; the Benjamin Meaker professorship at the University of Bristol (January 1989), a visiting fellowship at the Australian National University (September/October 1994), an Erskine fellowship at the University of Canterbury, New Zealand (March/April 1997), visiting positions at Princeton University (August-December 1997), California Institute of Technology (January-August 1998), and University of Southern California (December 1998-January 1999). He has held numerous administrative positions, including director of CentER (1992-2000) and dean of the Faculty of Economics and Business Administration at Tilburg University (1989-2000).

In 1994 he was elected fellow of the Econometric Society.

He joined IZA as a Research Fellow in September 2000.