Dale T. Mortensen, a recent Nobel laureate and the Board of Trustees Professor of Economics at Northwestern University in the Weinberg College of Arts and Sciences, died on Jan. 9, surrounded by his family. He was 74.

Prof. Mortensen pioneered a new approach to studying important economic problems now known as search theory. Utilizing the theory, Mortensen developed an original approach to investigating the labor market, revolutionizing how economists and policymakers view labor market matters and the role of government policy and regulation.

That original approach can, for example, explain why it takes so long for job seekers to find acceptable jobs even in good economic times, when vacancies are plentiful, or why firms with vacancies fail to fill positions quickly even though large numbers of people are unemployed. 

Macroeconomists cite Prof. Mortensen’s work as a key element in understanding how unemployment changes during the cycle. Search theory has since been applied to a host of other major areas of economics such as monetary theory, housing markets, marriage markets, etc.

“On behalf of the entire Northwestern community, I extend my deep condolences to Professor Mortensen’s family,” said Northwestern President Morton Schapiro. “He will be deeply missed by his colleagues at Northwestern — and by the world. His groundbreaking work is especially relevant to policymakers attempting to address unemployment today.”

In 2011, a two-day symposium on the Evanston campus brought together more than 160 colleagues, including leading academics, policymakers and former students, to honor Mortensen and his work. Co-sponsored by Northwestern and the Federal Reserve Bank of Chicago, the symposium perhaps best brought to life why Mortensen’s pioneering research has made such a difference in academia and policy circles.

“The DMP model [named after Mortensen and the two other 2010 Nobelists who won the prize with him] gives us a handle on the kind of cost or friction that allows us to think concretely about observations about why people are looking for jobs at the same time as firms are looking for people,” said Martin Eichenbaum, the Ethel and John Lindgren Professor of Economics at Northwestern. 

“It shows that labor markets are different from traditional commodity markets, such as wheat, where everyone knows about the object being traded, and there aren’t any important frictions to trade,” he said.

Mortensen got word about the Nobel Prize in Economics the day of the announcement, Oct. 11, 2010, during a lunch in Denmark with a colleague. Coincidentally, right after the lunch, the colleague went on to deliver an already scheduled lecture related to Mortensen’s work. At the time, Mortensen also was the Niels Bohr Visiting Professor at the School of Economics and Management at Aarhus University (from 2006 to 2010).

During a conference call from Aarhus with media that day, Mortensen jokingly gave the simplest explanation of his research about the complicated process of matching employers with employees. “It takes time for workers to find jobs and for employers to find workers,” Mortensen quipped.

Classical economic theory says that buyers and sellers — or in this case, employers and potential employees — always find each other. But this does not happen in the real world. While Mortensen’s research may seem at first glance to be intuitive, the insights that resulted from the work helped revolutionize not only labor economics, but also fields such as public finance and housing economics.

The Nobel Prize is given for work done over a long period of time, and Mortensen, who had been at Northwestern since 1965, pointed out that colleagues were quick to joke about how his lifetime of work at the University seemed to contradict his pioneering work on the mismatch of jobs between employers and employees.

“One of the things I study is why people move, though my entire career has been at Northwestern,” he said. “Colleagues say I study it to see what other people do.”

After the Nobel ceremony in Sweden in January 2011, Mortensen delivered a short but heartfelt talk at the concluding banquet in the Blue Hall at the Stockholm City Hall, a building constructed between 1911 and 1923 and inspired by palaces of the Renaissance. In thanking the Royal Swedish Academy of Sciences and the Nobel Foundation for the honor, on behalf of himself and his co-winners, Mortensen cited the late Studs Terkel, a Pulitzer Prize-winning author who was known for his oral histories of common Americans.

“Work was a search, sometimes successful, sometimes not, for daily meaning as well as daily bread,” Mortensen said, quoting Terkel’s words in “Working: People Talk About What They Do All Day and How They Feel About What They Do.”

“Even for those who are less fortunate in their allocation of work, being unemployed is a miserable state,” Mortensen continued in his remarks. “These facts add to the reasons for supporting the income of the unemployed during this recession and restoring prosperity as soon as possible.”

His remarks spoke to the heart of unemployment and left many in tears.

Dale T. Mortensen was born in Enterprise, Ore., and grew up in Hood River, Ore. He earned a bachelor of science degree in economics from Willamette University of Salem, Ore., and a Ph.D. from Carnegie Mellon University of Pittsburgh. 

He is survived by his wife, Beverly, a faculty member at Northwestern who is a scholar of ancient Judaism and contemporary religious thought; by brothers Arne and Irving Mortensen, both from Washington state; by son Karl Patton Mortensen and his wife, Liz, of the Detroit area; daughter Lia DuBarry Mortensen of Chicago; daughter Julie Mortensen Glanville and her husband, Shawn, of St. Charles, Ill.; and by grandchildren Sarah Mortensen, Heather Glanville, Drew Glanville, Jesse Osborne, Kristopher Mortensen, Tara Zrepsky, Patrick Glanville and Lily Osborne. 

All of them joined the contingent of family and friends — 29 in all — in Stockholm during the Nobel week of festivities. A Swedish television program that aired that week showed Mortensen, an accomplished musician, at his home in Evanston at the time singing “Old Man River,” accompanied by Beverly on piano.

The Nobel Prize in Economics — officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — was established by Sweden’s Riksbank in 1968 to mark the central bank’s 300th anniversary. The prize is awarded annually for “work of outstanding importance” in the field of economic science, and the winners are selected by the Royal Swedish Academy of Sciences. Mortensen, Peter Diamond and Christopher Pissarides shared a total prize of $1.5 million.

Private services for the family will be held and internment will be in Memorial Park, Skokie, Ill. A public memorial will be announced at a later date. In lieu of flowers, please send tax-free donations to “Willamette University, Mortensen Scholars fund,” 900 State St., Salem OR 97301, attn.: Stephen Brier, vice president.