Investigating Dual Labor Market Theory for Women

30 September 2007
By Dr. Christine Siegwarth Meyer with Dr. Swati Mukerjee of Bentley College

The theory of the dual labor market posits that the labor market features two separate segments: the primary sector, which is characterized by higher wages, greater returns to human capital, stable employment, and desirable working conditions; and the secondary sector, which lacks these attributes. Additionally, there are barriers to mobility between the two sectors, leading some workers to be rationed into the undesirable secondary sector. While this theory was validated in the men's labor market in the 1980s, no evidence of segmentation was found for the women's labor market. In this article from the Eastern Economic Journal, NERA Senior Vice President Dr. Christine Siegwarth Meyer and Dr. Swati Mukerjee of Bentley College re-examine the dual market hypothesis in light of the many changes affecting the women's labor market since the early 1980s, including rising labor force participation rates and earnings that are catching up with those of men. By taking into account certain unique features of the women's labor market, the authors evaluate whether later evidence supports a homogenous or a dual market for women.