The Dual Labour Market Theory
Dual Labour Market theory was proposed by Prominent American economists, Doeringer and Piore in 1970, when they noticed division in American labour class.
As per the theory, labor class was divided into- primary and secondary where the jobs in primary sector are of higher salary and responsibility, with better working conditions, status and work environment. Unlike the primary sector, jobs in the secondary sector possess negative characteristics such as low income, no job security, and poor working conditions.
To put it in simpler words, the dual labor theory suggests that every economy is “divided between good and bad jobs”.
In this article, we will discuss more about dual labor market-
Difference Between the Primary and Secondary Labor Markets
The whole theory of “Dual Labour Market” is based on the segregation of labor in two types of labor markets – primary and secondary.
| Primary sector | Secondary sector |
| | |
| It consists of jobs for highly educated people with specialized degrees and a set of skills. | It consists of jobs for uneducated people with no or very specific skill set. |
| Jobs with benefits such as good working conditions, high salary, job security, etc. | There is no job security. Low paying jobs with poor working conditions. |
| It offers a higher career scope. | It does not promise upscaling in career. |
The major difference between both the markets is- the secondary is associated with the non- preference and poor working conditions unlike the primary, mainly because the people in primary are more knowledgeable.
Dual Labour Market in Economics
Dual Labour Market in economics refers to the division of the labor sector of a country into two sectors, Primary and Secondary.
Earlier, the secondary sector was distinguished from the primary sector as the primary sector consisted of well- educated and white- collar people. The secondary sector consisted mostly of migrant workers, women and blue- collared people.
Developed societies with thriving economies are characterized by dual labor markets. In this scenario, the primary sector is filled by the natives whereas the secondary sector is mostly acquired by international migrants who migrated in hopes of a better life.
Dual Labour Market in Present Day Economy
Even though the theory was first coined in 1970, it still exists.
The primary labor market with its well-paid and opportunities driven benefits, and secondary is quite the opposite.
Economic Disparities:
There is a significant income difference between the two sectors. The workers in the primary labour market receive better employment and earn more than the ones seeking employment in the secondary.
Digital Divide:
The technology plays a vital role in this segregation of the market. Not everyone has access to technology. Those who lack technological support tend to fall behind in the secondary sector.
Policy Implications:
The dual labor market theory sheds light on the need for policies to quell the inequality and the problems faced by the secondary sector. The government hence has taken initiatives like skill development, girl child education, labor protection and employment schemes to protect the interest of those in secondary sector.
Though dual market labour theory has its roots in America but gradually the phenomena was noticed in other parts of the world. To know about the impact on Indian markets, read the detailed report by World Bank.
Key Takeaways
Dual Labour Market Theory divides the labor in a society into sectors- primary and secondary where the jobs in primary sector are of higher salary and responsibility, with better working conditions, status and work environment. Unlike the primary sector, jobs in the secondary sector possess negative characteristics such as low income, no job security, and poor working conditions.
FAQs
Q1 What is an example of Dual Labour Market theory?
A. Here’s an example of dual market theory:
Primary labor market: An architect and a doctor. Both fall under the umbrella of primary , but serve different needs for society.
Secondary Labor Market: Waiters and rag pickers are a part of the secondary sector, serving different purposes.
Q2 What are the examples of secondary sector?
A Blue collar workers such as carpenter, cook, waiter, retail worker, service person, etc. are examples of secondary sector.
Q3 What are the examples of primary sector?
A. White- collar workers such as teacher, lawyers, engineers are a few examples that fall in primary sector.
Q4 What are the two segments that the labor market is divided into?
A. The labor market is divided into 2 sectors, primary sector and secondary sector.
Q5 What is a factor that remains relevant in maintaining a bridge between these 2 sectors of the economy?
A Discrimination is one such factor that plays a role in the dual labour market. Immigrants, women and minority groups are usually compelled into the secondary sector