Mortensen, who won the Nobel along with Peter Diamond of the Massachusetts Institute of Technology and Christopher Pissarides of the London School of Economics, has been at Northwestern since 1965.
He joked his award-winning research, which involved supply and demand in the job market, did not reflect his own career, which included one employer for more than 40 years.
"One of the things I study is why people move, though my entire career has been at Northwestern. Colleagues say I study it to see what other people do," a Northwestern University news release quoted him as saying.
His work explained why it took jobseekers so long to find work, even when jobs were plentiful, and why it took as long as it does for employers to fill a job even when candidates were plentiful.
The search theory has been applied to other economic areas of study, such as housing markets and even marriage markets. But it also quantifies how the labor market is different from commodities such as wheat, corn or metals, as the markets include different levels of "frictions" that slow down transactions.
"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," Mortensen said.
Offering a simpler version of his theory on the day he won the Nobel Prize in October 2010, Mortensen said it takes time "for workers to find jobs and for employers to find workers."
The university said he was surrounded by family when he died.
"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," Northwestern President Morton Schapiro said.