CRITIQUE OF THE DUAL APPROACH

Watcher

1. Three hypotheses: 1) primary high wage and secondary low wage sectors; 2) distinction is between good and bad jobs rather than skilled and unskilled workers; 3) second sector workers develop pattern of job instability.

2. Four hypotheses on second (1) useful to dichotomize into two sectors; (2) wage and employment mechanisms are distinct from primary; (3) economic mobility sharply limited; (4) second has pervasive underemployment.

3. Primary has internal labor market, efficiency plays minor part, expansion by tech. not human R.

4a. Productivity and high wage goes to job rather than worker.

b. Watcher claims efficiency oriented institutional response to market forces generated by idiosyncratic jobs and the technology of on-the-job training.

5. Would argue that good jobs scarce rel. pareto optimum but inefficiency results from long recognized neoc. factors, e.g., market power: oligopoly or unions, high wages not offset by savings in turnover costs gen. subs. toward capital and imperfection inherent in market.

6. Wage determination in primary determined by highly structured internal market, secondary does not reward human capital, industry and occupation biggest variables. Dual do not accept supply and demand plus legislated minimum wage as explaining, some say sexism and racism determined by political and social forces.

7. Subs. underemployment: human capital not exploited to greatest, etc.

8. No, because structural not related to disc. and even less struc. in secondary sector.

9. No, because has not affected mobility, therefore need to legislate change.

10. More good jobs by direct action. Because manpower training, agg. demand, trans payments have not changed mobility structure.

11. Conclusions: 1) dual has revived interest in internal labor market; 2) strict dualist division primary and secondary not supported by data but segmented market (neo) holds on basis of H.R., and some dual arguments; 3) evidence on unemployment in secondary informative and useful; 4) says legislated policy cure would not solve structural problems and increase amount of monopoly rent; 5) no overall theory of labor market.

12. Piore and Watcher agree that endogeneity of tastes and technology is the major issue on which dualist and neo models diverge.

return to books