A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment
Year: 1985
Type: report
Abstract: This paper develops a model of dual labor markets based on employers' need to motivate workers.In order to elicit effort from their workers, employers may find it optimal to pay more than the going wage.This changes fundamentally the character of labor markets.The model is applied to a wide range of labor market phenomena.it provides a coherent framework for understanding the claims of industrial policy advocates.it also can provide the basis for a theory of occupational segregation and discrimination which will not be eroded by market forces.Finally, the model provides the basis for a theory of involuntary unemployment.
DOI: 10.3386/w1666
Authors: Jeremy Bulow, Lawrence Summers
Institutions: National Bureau of Economic Research, Stanford University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3124399353