Dual Labor Market

HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Dual Labor Market

What is a Dual Labor Market?

The labor market consists of two tiers: the Primary and Secondary Sector. For instance, the workers in the upper Primary Sector enjoy high salaries, excellent benefits, and employment security. On the other hand, the workers in the lower Secondary Sector experience low wages, higher turnover, and job insecurity.

The past and the present:

In years past, the dual labor market theory was thought to focus mainly on factors such as discrimination, poverty, and welfare. 

Today, the dual labor market still exists, although discrimination isn’t as severe as it once was. The Primary Sector still continues to be made up of those who received higher education, while the Secondary Sector still consists of individuals with less education.

In economics:

Also known as the job market, a labor market refers to the supply and demand for jobs in the economy. Employees looking for work provide the supply, while employers provide the demand. 

When a society has good economic health, they tend to have a balance in their labor market’s chain of supply and demand. On the other hand, those societies that have a failing economy often suffer from an imbalance on either side of the supply and demand chain. Affecting factors include: 

  • Immigration
  • Average population age
  • Education levels

The segmented labor market:

Segmentation in the labor market is a key player in the dual labor market structure. A segmented labor market typically refers to the individual submarkets that divide the labor markets. In other words, we can subdivide the primary and secondary sectors into additional sectors. For example, professionals in the primary sector may receive high pay but have little job security. This is similar to a secondary sector individual. The segmented labor market can be due to factors such as temporary contracts, and migrant or non-migrant workers.

Related Terms: Floating Holidays

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