Distributional assumptions and a test of the dual labor market hypothesis
Recent application of the switching regression model to allocate workers into the primary and secondary labor markets is considered to be the best solution to the classification problem of the empirical testing of the dual labor market theory. In such models, normality of the error terms is assumed. This paper adopts the switching regression model to test the dual labor market theory by assuming different distributions of the error terms. The test results strongly support the dual labor market theory regardless of the assumption one makes about the error terms. However, the results indicate that different distribution can lead to different percentage distributions of workers in the two segments. In particular, the normal distribution generates more workers in the primary segment than the non-normal distributions. Therefore, care must be taken not to generalize the type of industries or occupations that fall under the primary and secondary segments. Copyright Springer-Verlag Berlin Heidelberg 2003
Volume (Year): 28 (2003)
Issue (Month): 3 (July)
|Contact details of provider:|| Postal: Josefstädter Straße 39, 1080 Wien|
Phone: ++43 - (0)1 - 599 91 - 0
Fax: ++43 - (0)1 - 599 91 - 555
Web page: http://link.springer.de/link/service/journals/00181/index.htm
More information through EDIRC
|Order Information:||Web: http://link.springer.de/orders.htm|
When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:28:y:2003:i:3:p:461-478. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.