Unemployment Research Nabs Nobel Prize

Three economists will share the 2010 Nobel Prize for Economic Science for their research in the labor market and how governments’ economic policies affect unemployment. Peter Diamond, Dale Mortensen, and Christopher Pissarides have won for “their analysis of markets with search frictions,” the Royal Swedish Academy of Sciences said Monday. The economists found that the time and effort it takes to search for jobs and candidates creates friction in the market, meaning people are without jobs even as job openings abound. The economists also find that generous unemployment benefits lead to a higher unemployment rate. Diamond and Mortensen are Americans; Pissarides is a British and Cyriot citizen. Diamond, a 70-year-old MIT professor, is an expert in Social Security and pensions and was nominated by President Obama to be a member of the Federal Resserve (the Senate failed to confirm him.) Mortensen, 71, teaches economics at Northwestern University, and Pissarides, 62, teaches at the London School of Economics.