Segmented Labor Markets and Unemployment

• This paper suggests various alternatives to the Harris-Todaro theory in explaining unemployment in segmented labor markets. We focus on a labor market with a perfectly competitive secondary sector and an imperfectly competitive primary sector, the latter combining salient features of the efficiency wage, insider-outsider, and bargaining theories of employment and wage formation. Unemployment and labor market segmentation are explained with reference to heterogeneous preferences, productivities, and endowments amond workers. The responsiveness of unemployment to external shocks is shown to depend crucially on whether the above heterogeneities are exogenously given or whether they are endogenously generated through workers' employment histories.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

Economics

Nationalekonomi

Publication and Content Type

vet (subject category)

rap (subject category)