Mortensen won the award along with Peter Diamond of the Massachusetts Institute of Technology and Christopher Pissarides of the London School of Economics.
The three academics will share the prize and a $1.5 million award.
Mortensen's work focuses on labor economics.
Starting last week, Nobel Prize winners in different categories were named. Loved ones of Dale Mortensen had their fingers crossed for a few years that he would win the prize -- and it finally happened.
"He called me this morning at 5:30 and they had just emailed him, that's how they announce it now," said Beverly Mortensen, wife.
Beverly says her husband tried to temper his excitement as he told her the big news. The 71-year old phoned his wife from Denmark where he's currently a visiting professor at a university.
Over the years, Mortensen has earned awards and the respect of his colleagues for his groundbreaking research of labor economics. Recently, earning the Nobel Prize seemed like a distinct possibility.
"It's been in the air for a few years. People talk about it, so every year about this time, everybody says maybe this year. But he didn't ever really dare to imagine he would get it," said Beverly Mortensen.
Mortensen and the two other winners' work examines supply and demand in the job market - how there can be both high unemployment and job vacancies. It's a theory Mortensen researched for decades and he says it wasn't well received at first.
"It was a new perspective, and there were people who took a while to get their heads around that idea," said Mortensen.
Mortensen has been a professor at Northwestern University for 45 years and on Monday his colleagues were celebrating his accomplishment.
"We all know who Dale Mortensen is, but he isn't a name that's been on the front of the New York Times and I think this is wonderful recognition for a guy who devoted his life to ideas, stuck with it and really made a difference," said Bill Rogerson, Economics Department chair, Northwestern University.
Dale Mortensen gets back from Denmark next week and his colleagues are already planning a party for him. Then in the spring Mortensen will retire from Northwestern but he will remain at the university as a professor emeritus and continue his research.