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Employer Size and Dual Labor Markets

  • Rebitzer, James B
  • Robinson, Michael D

Effort regulation models argue that labor markets are segmented because of differences in the technology of supervision across firms. Primary jobs pay above market clearing wages because these jobs are difficult to monitor. Secondary jobs, in contrast, pose no monitoring difficulties and, therefore, pay a market clearing wage. If, as the literature suggests, increases in employer size make supervision more difficult, the authors should observe that wages increase with employer size in primary jobs but not secondary jobs. Copyright 1991 by MIT Press.

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Article provided by MIT Press in its journal Review of Economics & Statistics.

Volume (Year): 73 (1991)
Issue (Month): 4 (November)
Pages: 710-15

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Handle: RePEc:tpr:restat:v:73:y:1991:i:4:p:710-15
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  1. Rebitzer, James B & Taylor, Lowell J, 1991. "A Model of Dual Labor Markets When Product Demand Is Uncertain," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1373-83, November.
  2. Calvo, Guillermo A & Wellisz, Stanislaw, 1978. "Supervision, Loss of Control, and the Optimum Size of the Firm," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 943-52, October.
  3. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
  4. Alan B. Krueger, 1991. "The evolution of unjust-dismissal legislation in the United States," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(4), pages 644-660, July.
  5. Cain, Glen G, 1976. "The Challenge of Segmented Labor Market Theories to Orthodox Theory: A Survey," Journal of Economic Literature, American Economic Association, vol. 14(4), pages 1215-57, December.
  6. Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, vol. 75, pages 123.
  7. Dickens, William T & Lang, Kevin, 1988. "Labor Market Segmentation and the Union Wage Premium," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 527-30, August.
  8. Mellow, Wesley, 1982. "Employer Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 495-501, August.
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