Lazarsfeld was born to Jewish parents in Vienna: his mother was the Adlerian therapist Sophie Lazarsfeld, and his father Robert was a lawyer. He attended schools in Vienna, eventually receiving a doctorate in mathematics (his doctoral dissertation dealt with mathematical aspects of Einstein's gravitational theory). In the 1920s, he moved in the same circles as the Vienna Circle of philosophers, including Otto Neurath and Rudolf Carnap. He came to sociology through his expertise in mathematics and quantitative methods, participating in several early quantitative studies, including what was possibly the first scientific survey of radio listeners, in 1930–1931.
In 1926 he married the sociologist Marie Jahoda. Together with Hans Zeisel they wrote a now-classical study of the social impact of unemployment on a small community: Die Arbeitslosen von Marienthal (1932; English eds. 1971). He divorced Marie in 1934 and married his colleague Herta Herzog, who divorced him in 1945.
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