EVANSTON, Ill. --- 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 this morning, Jan. 9, surrounded by his family. He was 74.

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 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 and many others.

“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 interment will be in Memorial Park, Skokie, Ill.

A public memorial will be held at 11 a.m. Friday, Jan. 31, at Alice Millar Chapel, 1870 Sheridan Road, Evanston. A reception in the Guild Lounge, located directly across the street in Scott Hall, will follow.

In lieu of flowers, please help support Professor Mortensen’s final wish to create an annual scholarship for talented and financially deserving students at Willamette University (his undergraduate alma mater). Checks should be made payable to Willamette University, with a notation for the Mortensen Scholars Fund, and mailed to Willamette University, Attn: Steve Brier, 900 State Street, Salem, OR 97301.

Comments from colleagues and former students:

• Daniel Linzer, provost, Northwestern:

"Dale was a tremendous colleague. He was a caring teacher and mentor. He offered such a wise voice within the University and combined a deep commitment to his work with a warm sense of humor. Dale had that special twinkle in his eye, and he will be greatly missed."

• Sarah Mangelsdorf, dean, Weinberg College of Arts and Sciences, Northwestern University:

“Dale was a brilliant scholar whose humanity informed his work — he was a wonderful human being. He was very kind and had a terrific sense of humor. For all his awards and accomplishments, he remained tremendously approachable and supportive of his students and colleagues. We will all miss his warmth and his wit.”

• Kenneth Burdett, James Joo-Jin Kim Professor of Economics, University of Pennsylvania (former student of Professor Mortensen and co-author):

“He was a great economist who changed the way we think about many important economic problems. His work will continue to influence economists and policymakers for many years to come. I will miss him greatly. He was a good man and friend.”

• Bent Jesper Christensen, professor of economics, School of Economics and Management, Aarhus University, Denmark (co-author):

“Dale Mortensen has been a tremendous inspiration for researchers and students in Denmark for decades. His father was born in Denmark and immigrated with his family to the United States at age 10. In 1998, Dale spent a sabbatical at Aarhus University, where he studied detailed Danish register-based matched employer-employee data. He had been collaborating with researchers in Aarhus since then. During a recent visit with Dale's in December, he amazed me by still being able to work hard with me on our joint paper with Jesper Bagger. Dale and I also edited a forthcoming book with Henning Bunzel, at Aarhus, featuring work by Northwestern and Aarhus students of Dale's, who over the years, have been applying his models to Danish data. Dale and Beverly have been to our home often to sing and play music with our kids. He is an intellectual giant and a dear friend who will be missed by all of us at Aarhus.”

• Robert Coen, professor emeritus of economics, Northwestern University:

“Dale was my colleague at Northwestern and dear friend for more than 40 years. His work put flesh on the bones of the theory of markets. Economists long recognized that buyers and sellers must search for one another and then agree when and if to trade, but they lacked mathematical models to analyze such complex dynamic processes until Dale showed the way. He had the brilliance and untiring determination to solve these very difficult problems. He brought distinction to Northwestern economics not only through his pathbreaking work, but also through his modest, civil temperament that nurtured a cordial atmosphere in which colleagues and generations of graduate students have thrived. His scholarship and humanity were an inspiration to all.”

• Robert Gordon, Stanley G. Harris Professor of the Social Sciences, Northwestern University:

“Dale Mortensen was one of the co-inventors of what is called ‘Modern Macroeconomics,’ an achievement for which he was awarded the Nobel Prize in Economics in 2010. Less well known is that he helped to create the earlier imperfect-information theory of business cycles more than four decades ago.”

• Rasmus Lentz, associate professor of economics, University of Wisconsin-Madison (former student of Professor Mortensen and co-author):

“Dale was a great friend, advisor and collaborator. I will miss him dearly. He will always be in my heart and in my work.”

• Robert E. Lucas, John Dewey Distinguished Service Professor in Economics and the College, University of Chicago (Professor Mortensen’s professor while at Carnegie Mellon):

“Dale was a great economist. He combined sophisticated economic theory and careful empirical work in ways that will continue to inspire economic researchers for decades to come. His work completely and very fruitfully transformed the way all of us think about labor markets and unemployment.”

• Joel Mokyr, Robert Strotz Professor of Arts and Sciences, Northwestern University:

“Dale was an economist whose original insight revolutionized our understanding of the labor market. He had an amazingly sharp mind and could cut to the chase in many complex economic arguments. Often in academic seminars, he ended up explaining an intricate economic argument not only to the audience but also to the speaker."

• Christopher Pissarides, professor of economics and political science at the London School of Economics and Nobel laureate. (With Professor Mortensen, he was the recipient of the 2010 Sveriges Riksbank Prize in Economic Sciences.)

“Dale was an exceptional person, a devoted family man and a friend and collaborator that I shall miss greatly. We spent days and nights together working out our theories of the labor market that eventually took us to Stockholm for that wonderful week. But we also knew how to put work behind us and enjoy a nice meal and good wine with our friends and families. He taught me a lot, and I like to think that I taught him some too. I shall miss my friend.”