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Dual Labor Markets, Efficiency Wages, and Search

Author

Listed:
  • Albrecht, James W.

    (Georgetown University)

  • Vroman, Susan B.

    (Georgetown University)

Abstract

This article presents an equilibrium model of a dual labor market. Firms are assumed to be identical ex ante and dualism arises endogenously. The dual labor market outcome is supported by efficiency wage and search considerations. Firms choose wage/effort requirement packages optimally given optimal search and effort choice by workers, and vice versa. The authors prove existence and investigate the occurence and nature of dual labor market equilibria. Copyright 1992 by University of Chicago Press.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Albrecht, James W. & Vroman, Susan B., 1990. "Dual Labor Markets, Efficiency Wages, and Search," Working Paper Series 267, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0267
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    References listed on IDEAS

    as
    1. Burdett, Kenneth & Mortensen, Dale T, 1980. "Search, Layoffs, and Labor Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 88(4), pages 652-672, August.
    2. Dickens, William T & Lang, Kevin, 1985. "A Test of Dual Labor Market Theory," American Economic Review, American Economic Association, vol. 75(4), pages 792-805, September.
    3. James J. Heckman & V. Joseph Hotz, 1986. "An Investigation of the Labor Market Earnings of Panamanian Males Evaluating the Sources of Inequality," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 507-542.
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    Cited by:

    1. Mohamed Jellal & Francois-Charles Wolff, 2003. "Dual Labor Markets And Strategic Efficiency Wage," International Economic Journal, Taylor & Francis Journals, vol. 17(3), pages 99-112.
    2. Hie Joo Ahn & Bart Hobijn & Ayşegül Şahin, 2023. "The Dual U.S. Labor Market Uncovered," NBER Working Papers 31241, National Bureau of Economic Research, Inc.
    3. Sasaki, Masaru, 1999. "An Equilibrium Search Model with Coworker Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 377-407, April.
    4. Basu, Arnab K. & Chau, Nancy H. & Soundararajan, Vidhya, 2021. "Contract employment as a worker discipline device," Journal of Development Economics, Elsevier, vol. 149(C).
    5. Jellal, Mohamed & Zenou, Yves, 1999. "Efficiency wages and the quality of job matching," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 201-217, June.
    6. Marco Di Cintio & Emanuele Grassi, 2015. "Wage Incentive Profiles in Dual Labour Markets," Economica, London School of Economics and Political Science, vol. 82(328), pages 790-812, October.
    7. De Palma, Francesco & Seegmuller, Thomas, 2005. "Dual Labor Market And Endogenous Fluctuations," Macroeconomic Dynamics, Cambridge University Press, vol. 9(3), pages 398-411, June.
    8. Arai, Kazuhiro, 1997. "Cooperation, job security, and wages in a dual labor market equilibrium," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 26(1), pages 39-57.
    9. Esfahanian , Homa, 2015. "Productivity Investment and Labor Force Participation in Search Equilibrium," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 10(1), pages 23-63, January.
    10. Patrice Gaubert & Marie Cottrell, 1999. "Neural Network And Segmented Labour Market," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00134146, HAL.
    11. Smith, Tony E. & Zenou, Yves, 1997. "Dual Labor Markets, Urban Unemployment, and Multicentric Cities," Journal of Economic Theory, Elsevier, vol. 76(1), pages 185-214, September.
    12. J. Ignacio, Giménez-Nadal & Jose Alberto, Molina & Jorge, Velilla, 2017. "Leisure and effort at work: incorporating self-employment into urban markets," MPRA Paper 77972, University Library of Munich, Germany.
    13. Schlicht, Ekkehart, . "Job Rents in a Stylized Labor Market," Chapters in Economics,, University of Munich, Department of Economics.
    14. Marie Cottrell & Patrice Gaubert, 2000. "Classification Of Recurring Unemployed Workers And Unemployment Exits," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00134148, HAL.
    15. Jellal, Mohamed, 2014. "Agglomeration economies and optimal efficiency wage," MPRA Paper 57836, University Library of Munich, Germany.
    16. WAUTHY, Xavier & ZENOU, Yves, 1997. "Efficiency wages, labor heterogeneity and the fInancing of the training cost," LIDAM Discussion Papers CORE 1997072, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. M. Antonella Mancino, 2022. "A Search Model Of Early Employment Careers And Youth Crime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(1), pages 329-390, February.

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    More about this item

    Keywords

    Efficiency wages; Search theory; Dual labor market;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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