CRITIQUE OF THE DUAL APPROACH
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
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
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