The dual labour market (also referred to as the segmented labour market) theory aims at introducing a broader range of factors into economic research, such as institutional aspects, race and gender. It divides the
economy
An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...
into two parts, called the "primary" and "secondary" sectors. The distinction may also be drawn between formal/informal sectors or sectors with high/low value-added. A broader concept is that of
labour market segmentation. While the word "dual" implies a division into two parallel markets, segmentation in its broadest sense may involve several distinct labour markets.
In a dual labour market, a secondary sector is characterized by short-term
employment
Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a cor ...
relationships, little or no prospect of internal
promotion, and the determination of
wage
A wage is payment made by an employer to an employee for work (human activity), work done in a specific period of time. Some examples of wage payments include wiktionary:compensatory, compensatory payments such as ''minimum wage'', ''prevailin ...
s primarily by market forces. In terms of occupations, it consists primarily of low or unskilled jobs, whether they are
blue-collar
A blue-collar worker is a person who performs manual labor or skilled trades. Blue-collar work may involve skilled or unskilled labor. The type of work may involve manufacturing, retail, warehousing, mining, carpentry, electrical work, custodia ...
(manual labour),
white-collar (e.g. filing clerks), or
service industry
The tertiary sector of the economy, generally known as the service sector, is the third of the three economic sectors in the three-sector model (also known as the economic cycle). The others are the primary sector (raw materials) and the s ...
(e.g. waiters). These jobs are linked by the fact that they are characterized by "low skill levels, low earnings, easy entry, job impermanence, and low returns to education or experience."
[The Dual Labor Market: Theory and Implications, in The State and the Poor, edited by Samuel H. Beer and Richard Barringer, pp. 55-59. Winthrop Publishers.]
The
informal economy
An informal economy (informal sector or grey economy) is the part of any economy that is neither Taxation, taxed nor monitored by any form of government. Although the informal sector makes up a significant portion of the economies in developin ...
consists of labour that is often "pay-under-the-table". This market tends to attract the poor and a disproportionate number of
minority group
The term "minority group" has different meanings, depending on the context. According to common usage, it can be defined simply as a group in society with the least number of individuals, or less than half of a population. Usually a minority g ...
members. The dual labour market theory generally ignores the micro-level decisions such as an individual’s cost-benefit analysis. Instead, it focuses on immigration as a “natural consequence of
economic globalization
Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization and cultural globalization, as well as the general term of globalization.
Econ ...
and market penetration across national boundaries” (Massey, ''et al.'', 1993, p. 432). In whole, it is not concerned with individual decisions to migrate but focuses on what pulls them, as a collective group, to migrate. It argues that international migration starts from the labour demands of modern civilization.
Notes
{{DEFAULTSORT:Dual Labour Market
Labour economics