Working Paper: NBER ID: w1670
Authors: William T. Dickens; Kevin Lang
Abstract: This paper replicates and extends our earlier analysis of dual market theory. We use a technique which estimates for each worker a probability of being in the primary sector on the basis of his characteristics. We use this information to determine the occupational and industrial composition of the sectors. We continue to produce results which are very supportive of the theory. In studies by other authors, workers were "assigned" to the primary or secondary sector on the basis of the industry or occupation in which they are employed and educated guesses about the industries or occupations which make up the two sectors. We find that previous studies, which produced mixed and inconclusive results, had serious misclassification problems. In the cases examined, at least half of all full time prime age male workers identified as being in the secondary sector by these classification schemes are found to have a high probability of primary sector attachment. Past studies which were most supportive of dual market theory are found to have had the least severe misclassification problems.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Sector Attachment (Y80) | Wage Outcomes (J31) |
| Misclassification of Workers (J79) | Underestimation of Primary Sector Attachment (E69) |
| Discrimination (J71) | Sector Attachment (Y80) |
| Education (I29) | Wage in Primary Sector (J31) |
| Experience (C99) | Wage in Primary Sector (J31) |
| Education (I29) | Wage in Secondary Sector (J31) |
| Experience (C99) | Wage in Secondary Sector (J31) |