Working Paper: NBER ID: w2127
Authors: Kevin Lang; William T. Dickens
Abstract: Neoclassical theory has been misrepresented in the segmented economy literature. Consequently, most tests of "structural" vs. "neoclassical" models are inadequate. Moreover, segmented economy theorists have concentrated on the least significant departures of segmented models from neoclassical economics. In fact, neoclassical economists have developed elements of a segmented labor market model which is similar to the segmented economy theories. We sketch this model and argue that the neoclassical model gives a precise meaning to the concept of dual or segmented labor markets but does not suggest that a classification system for job characteristics must rely on a single dimension.
Keywords: segmented labor markets; neoclassical economics; sociological theory
JEL Codes: J31; J41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Misrepresentation of neoclassical theory (B13) | Inadequate tests of structural versus neoclassical models (C50) |
| Neoclassical economists develop models incorporating elements of segmentation (F12) | Precise understanding of dual labor markets (J42) |
| Neoclassical model accounts for both supply and demand factors in wage determination (J29) | Challenges notion of significant departure of dual labor market theories from neoclassical principles (J42) |
| Queues and non-price rationing are compatible with neoclassical models (D45) | Can exist within a competitive framework (L19) |