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Title:An Alternative Approach to Testing Dual Labour Market Theory PDF Logo
Authors:Launov, Andrey
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1289
Abstract:In this paper we suggest an alternative approach to testing for the dual structure of the labour market. The novelty of the suggested approach is that rather than considering wage determination we concentrate on the turnover. To perform the test we suggest using a latent class count data framework, which allows modelling the turnover in the unobserved primary and secondary markets in the appropriate way. To illustrate the suggested approach we apply our methodology to the German labour market data. Our testing procedure finds no support for the predictions of the dual labour market theory. We also consider the problem of inconclusiveness of the test for involuntary confinement to the secondary market.
Subjects:segmented market
dual labour market
count data
latent class model
JEL:J42
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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