ABSTRACT
At the end of this chapter, readers should understand:
How the migration of workers across sectors or markets is crucial to the equalisation of wage rates within a neo-classical framework;
That labour markets can segment and that the nature of jobs performed within the primary sector, and the characteristics of the workers who perform such jobs, are inherently different to those jobs within the secondary sector and the traits of the workers who perform them;
That it may be appropriate to further divide jobs in the primary sector into upper-and lower-tier classifications, with pay and career-advancement opportunities differing between tiers;
That a number of possible explanations for the emergence of segmented labour markets have been suggested, with cost minimisation and the institutional nature of corporations as central themes to many of these;
That empirical validation of dual and segmented labour markets is influenced significantly by the techniques employed and by how market segments are classified;
How Bulow and Summers (1986) show that the desire to reduce shirking can lead firms to pay an efficiency wage in the primary sector that is higher than the alternative available within the secondary sector;
That, although the restriction of worker mobility between primary and secondary sectors is central to the existence of segmented labour markets, the empirical evidence in support of this claim is inconclusive.
