By Bjørg Tulinius
btu@adm.au.dk
“The Dale fairy-tale starts in 1980. And it has led to both world-famous research and a genuinely warm friendship.”
These are the poetic words used by Niels Westergård-Nielsen, Professor of Economics at the School of Business, to describe the close collaboration between economists at Aarhus University and this year’s winner of the Nobel Prize in Economic Sciences, Dale T. Mortensen.
Dale T. Mortensen is currently in Århus on a so-called Niels Bohr visiting professorship. He is also a professor at Northwestern University in Chicago.
Back in 1980 a number of economists met up at a conference in France. Niels Westergård-Nielsen was one of them, and he had already heard of Dale T. Mortensen during a visit to the University of Wisconsin. He had also heard of Mortensen’s theory that economic models cannot reveal anything about the labour market unless you also know something about the behaviour of individuals.
At the University of Wisconsin Westergård-Nielsen met one of Dale T. Mortensen’s former PhD scholars, and talking to him convinced the economist from Århus as well as a number of other economists that this was an entirely new discourse within the field of labour-market research. And they wanted to jump on board.
“We stood on a street in Aix-en-Provence one evening and decided to go for it! When we got back to Denmark we started collecting individual data,” explains Niels Westergård-Nielsen.
The economists from Aarhus University drew up an agreement with Statistics Denmark, arranging that they should be the only researchers in Denmark to be allowed to extract data straight from this source. The first data covered five per cent of the population of Denmark from 1976 to 1980.
Using the Danish data and Dale T. Mortensen’s theories, the Århus researchers were able to show (among other things) that there is a clear connection between the size of unemployment benefit and the length of unemployment and number of unemployed people. The higher the benefit, the longer the period of unemployment and the larger the number of unemployed people.
“Dale’s theories claim that we need to consider the actual behaviour of individuals before we can say anything general about society as a whole. And our data proved that he was right: a high level of benefit means that unemployed individuals are more selective about the kind of jobs – or salaries – that they are prepared to accept,” explains Niels Westergård-Nielsen.
Dale T. Mortensen was kept informed about the Danish data, and in 1982 he attended a conference at Sandbjerg along with leading labour-market researchers from all over the world.
“Dale was truly impressed by the Danish data. We were quite simply world leaders in this field at the time, and he has always remembered to refer to Aarhus University and our research in his own publications,” says Niels Westergård-Nielsen.
In 1983 Niels Westergård-Nielsen arrived at the University of Chicago (another major university in the same city as Northwestern University) after gaining his PhD from Århus. While he was there he met Dale T. Mortensen from Northwestern again, as well as all the other leading economists.
“The environment at the University of Chicago was terrible. You could be eating your lunch with a whole range of Nobel Prize winners – and most of them behaved pretty strangely! They were highly critical of everything and everybody, and were in constant competition with each other. Young researchers were scared out of their wits, and very few women could stand it,” explains Niels Westergård-Nielsen.
But Dale T. Mortensen was different. He was always open, hospitable and very sociable.
“He found a house for me and my wife while we were there, and he and his family often came to see us during the year we spent in Chicago. It was the start of a genuinely close and warm friendship.”
His American friend did not find it difficult to get his results published, and this is how the Danish data became well-known and recognised all over the world.
“It was always a bit harder for us Danes to get the academic journals interested in conditions in a small country in Scandinavia. But once Dale started using our data in a larger context, things got a lot easier,” explains Niels Westergård-Nielsen.
The relationship between the Århus economists and the professor from Chicago really started to blossom at the end of the 1990s, when Dale T. Mortensen started working for what was then known as the Centre for Labour Market and Social Research (CLS) at Aarhus University.
At the time the researchers also started to extend Dale T. Mortensen’s claim that you need individual data to produce valid models, applying it to companies as well. Since then the economists have collected data from companies, which in this connection are regarded as individual agents.
“In general Dale’s theories have proved that individual behaviour has a vital impact on the behaviour of society. And that’s quite a paradigm shift compared with the past. Marxist economists in particular used to set the agenda and claim that it was the other way round,” concludes Niels Westergård-Nielsen.
The rest of the Dale fairy-tale has been told many times since that Monday afternoon when Dale T. Mortensen got a call from the Nobel Prize committee just before giving a lecture at Aarhus University.
The American professor has been working as Niels Bohr visiting professor at the School of Economics and Management since 2006, and every year he spends three-five months among the students and researchers of Aarhus University.
So when the Nobel Prize is presented to Dale T. Mortensen in Stockholm on 10 December, it would be no surprise to learn that one or two researchers from Århus were celebrating quietly on their own behalf as well.
“It was always a bit harder for us Danes to get the academic journals interested in conditions in a small country in Scandinavia. But once Dale started using our data in a larger context, things got a lot easier.”
