Northwestern economics professor Dale T. Mortensen was named one of the three winners of the Nobel Prize in Economics for his contribution to the understanding of unemployment and other market imperfections.
Mortensen, a former director of NU’s Mathematical Methods in the Social Sciences program, will share the prize with fellow economists Peter Diamond and Christopher Pissarides. The win is the second Nobel Prize for a member of the NU faculty and the first for the economics department. John Pople, NU’s other Nobel laureate, completed the majority of the research he was honored for while at Carnegie Mellon University. In contrast, Mortensen has served on the NU faculty since 1965.
“The culture of this (economics) department is Dale,” economics Prof. Martin Eichenbaum said. “Whatever you say about Dale, it can’t be good enough.”
Mortensen, who is currently on a visiting professorship at the University of Aarhus in Denmark, was informed during lunch with colleagues, according to the Associated Press.
“So I was sitting there at the table, and I think they knew from the smile on my face what had happened. Everyone knows this is the day, ” he told the AP.
The Royal Swedish Academy of Sciences, the body that selects the winners, noted in their award citation that “the Laureates’ models help us understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy.”
Mark Witte, director of undergraduate economics at NU, said Mortensen’s work, which was done partly in collaboration with Diamond and Pissarides, “brought understanding of the labor markets beyond supply and demand.”
One application of Mortensen’s work is a mathematical model for how people find jobs. His research points out inherent inefficiencies in the job market, which can prevent workers from finding the right job and employers the right employees even during times of high unemployment. He has also studied how unemployment benefits can actually increase employment by making workers more likely to take risky jobs.
Other fields in which Mortensen has conducted research include the “marriage market,” the process by which people find and choose potential partners. His 1988 paper, “Matching: finding a partner for life or otherwise” explained that one reason for divorce is the effort it takes to find a perfect companion the first time around.
Mortensen will receive the prize on Dec. 10, the anniversary of Alfred Nobel’s death.
“He (is) one of the good guys,” economics Prof. Ian Savage said. “This is a big day for Northwestern.”
