An Alternative Approach to Testing Dual Labour Market Theory
AbstractIn this paper we suggest an alternative approach to testing for the dual structure of the labour market. The novelty of the suggested approach is that rather than considering wage determination we concentrate on the turnover. To perform the test we suggest using a latent class count data framework, which allows modelling the turnover in the unobserved primary and secondary markets in the appropriate way. To illustrate the suggested approach we apply our methodology to the German labour market data. Our testing procedure finds no support for the predictions of the dual labour market theory. We also consider the problem of inconclusiveness of the test for involuntary confinement to the secondary market.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1289.
Length: 22 pages
Date of creation: Sep 2004
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Find related papers by JEL classification:
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-05 (All new papers)
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