Nobel Prize: The Accomplishments of Three Scholars

The job market, unemployment and looking for a job are the research topics that won the Nobel Prize in Economics yesterday afternoon. This year's award went to Peter Diamond (MIT), Dale Mortensen (Northwestern University) and Christopher Pissarides (London School of Economics).

"Specifically, it was awarded to the search theory developed by the three scholars," says Tito Boeri, Full Professor in Labor Economics at Bocconi, "which explains why unemployment exists in conditions of macroeconomic equilibrium. The dual presence of the unemployed and available positions, due to frictions in the job market explained by the theory, is represented graphically by the Beveridge curve. After the recent release of data by ISTAT on available positions, this can be used to represent modern day Italy as well."

The theory developed by Diamond, Mortensen and Pissarides demonstrates that the job market is not very efficient and, continues Boeri, "has important implications on public policy, because it demonstrates how governments can act to facilitate matching between available positions and unemployed workers and suggest what effect changes in welfare policies will have on the job market."

Boeri has collaborated mostly with Pissarides. Of particular note are two books connected to the activities of the Debenedetti Foundation: the volume Women at Work: An Economic Perspective (Oxford University Press, 2005), edited by Pissarides, Boeri and Daniela Del Boca and Welfare and Employment in a United Europe (MIT Press, 2001), which Tito Boeri edited with Giuseppe Bertola and Giuseppe Nicoletti, and to which Pisarrides contributed.