Three academics who developed groundbreaking ideas that help explain why unemployment remains stubbornly high in the U.S. and other developed countries won this year's Nobel Prize in economics.

Peter Diamond—whose nomination by President Barack Obama to a spot on the Federal Reserve Board has been held up by Republicans questioning his qualifications—shared the award Monday with Dale Mortensen and Christopher Pissarides.

The trio pioneered research into the difficulties buyers and sellers often face in finding each other in the marketplace—and in particular, how that applies in the job market, where the buyers and sellers are employers and workers. This "search theory" has since been applied to a host of other topics, from the housing market to the search for a spouse.

"This is a good prize—these guys figured out a way of thinking about the labor market that we didn't have before," said International Monetary Fund chief economist Olivier Blanchard, who has worked extensively with Mr. Diamond and has also worked with Mr. Pissarides, who teaches at the London School of Economics.

Stockholm University economist Per Krussell, a member of the Nobel selection committee, said the decision to award the prize wasn't related to the weak job-market conditions today. Nevertheless, the three men's work lies at the center of a hotly contested debate over how much of today's high unemployment is the result of structural changes in the labor market and how much is merely the result of a weak economy. One of the quirks of today's high unemployment in the U.S. is that it has persisted despite an increase in the number of job openings.