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Home | Events Archive | An "Orthodox" Theory of Dual Labor Markets
Seminar

An "Orthodox" Theory of Dual Labor Markets

  • Series
    Macro Seminars
  • Speaker(s)
    Susan Vroman (Georgetown University, United States)
  • Field
    Macroeconomics
  • Location
    Tinbergen Institute Amsterdam, room 1.01
    Amsterdam
  • Date and time

    March 06, 2025
    16:00 - 17:15

Abstract

We study the equilibrium segmentation of the labor market into a primary segment with stable employment relationships and high wages, a secondary segment with unstable matches with low wages, and a tertiary segment consisting of those who do not participate. This segmentation emerges endogenously in a standard search and matching model with only a very limited set of additional assumptions. Thus, duality in the labor market is a natural outcome and there is no need for any "unorthodox" theory to explain it. We use our model to examine how the structure of the labor market reacts to productivity shocks. Joint paper with James Albrecht, Bart Hobijn, James Royal, and Aysegül Sahin.