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Testing Dual Labor Market Theory: A Reconsideration of the Evidence

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  • William T. Dickens
  • Kevin Lang

Abstract

This paper replicates and extends our earlier analysis of dual market theory. We use a technique which estimates for each worker a probability of being in the primary sector on the basis of his characteristics. We use this information to determine the occupational and industrial composition of the sectors. We continue to produce results which are very supportive of the theory. In studies by other authors, workers were "assigned" to the primary or secondary sector on the basis of the industry or occupation in which they are employed and educated guesses about the industries or occupations which make up the two sectors. We find that previous studies, which produced mixed and inconclusive results, had serious misclassification problems. In the cases examined, at least half of all full time prime age male workers identified as being in the secondary sector by these classification schemes are found to have a high probability of primary sector attachment. Past studies which were most supportive of dual market theory are found to have had the least severe misclassification problems.

Suggested Citation

  • William T. Dickens & Kevin Lang, 1985. "Testing Dual Labor Market Theory: A Reconsideration of the Evidence," NBER Working Papers 1670, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:1670
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    References listed on IDEAS

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    1. 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.
    2. William T. Dickens, 1983. "The Effect of Company Campaigns on Certification Elections: Law and Reality Once Again," ILR Review, Cornell University, ILR School, vol. 36(4), pages 560-575, July.
    3. Paul Osterman, 1975. "An Empirical Study of Labor Market Segmentation," ILR Review, Cornell University, ILR School, vol. 28(4), pages 508-523, July.
    4. Schiller, Bradley R, 1977. "Relative Earnings Mobility in the United States," American Economic Review, American Economic Association, vol. 67(5), pages 926-941, December.
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