What Is the Meaning Of Dual Labour Market & Its Importance

What Is the Meaning Of Dual Labour Market & Its Importance

5-6 minutes

The Dual Labour Market Theory

Dual Labour Market theory was given by prominent American economists, Doeringer and Piore in 1970, when they noticed a division in the American labor class.

According to the theory, the labor class was divided into primary and secondary sectors where the jobs in the primary sector are of high salary and responsibility, with better working conditions, status, and work environment. On the contrary, jobs in the secondary sector possess negative characteristics such as low income, no job security, and bad working conditions.

In other words, it can be said that the dual labor theory presents the view that every economy is ""divided between good and bad jobs.""

Theories of the Primary and the Secondary Labor Markets

The entire theory of ""Dual Labour Market"" is based upon the atomistic nature of segmentation that divides labor into two types of labor markets – primary and secondary.

The main difference between both markets is that the secondary is associated with non-preference and poor working conditions, unlike the primary, mainly because the people in the primary sector are more knowledgeable.

In economic terms, the conception of a dual labor market in a country is characterized by the division of the labor sector into two sectors, known as Primary and Secondary.

Previously, the secondary sector was differentiated from the primary sector as the primary sector comprised well-learned and white-collar individuals. The secondary sector was its opposite, comprising much of the migrant workers, women, and blue-collar individuals.

Developed societies with thriving economies are characterized by dual labor markets. In this scenario, the primary sector is filled by natives, whereas the secondary sector is mostly occupied 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.

• Economic Disparities: The difference in income between the two sectors is significant. Workers in the primary labor market receive better employment and earn more than those in the secondary sector.
• Digital Divide: Technology acts as a major force behind this segmentation of the market. Not everyone has access to technology. Those without technological support tend to remain backward in the secondary sector.
• Policy Implications: The dual labor market theory highlights the need for policies aimed at reducing inequality and addressing problems faced by the secondary sector. Consequently, the government has initiated measures such as skill development, education of girl children, labor protection, and employment schemes to protect the interests of people in the secondary sector.

Although the dual market labor theory has its roots in America, the phenomenon has been observed in other parts of the world. To learn about its impact on Indian markets, refer to the detailed report by the World Bank.

Key Takeaways

The Dual Labour Market Theory divides the labor in a society into two sectors—primary and secondary. Jobs in the primary sector are of higher salary and responsibility, with abundant amenities, status, and a favorable work environment. Unlike the primary sector, jobs in the secondary sector have negative characteristics such as low income, lack of job security, and poor working conditions.

FAQs

Q1. Give an example of the Dual Labor theory?

A: Here is an example of the dual market theory:

• Primary Labor Market: An architect and a doctor. Both may be categorized under primary ones, but they serve different needs for society.
• Secondary Labor Market: Waiters and rag pickers—working for society but meeting two different purposes.

Q2. Which are the examples of the secondary sector?

A: Blue-collar workers such as carpenters, cooks, waiters, retail workers, service persons, etc., are examples of the secondary sector.

Q3. What are the examples of the primary sector?

A: White-collar workers such as teachers, lawyers, and engineers are a few examples that fall into the primary sector.

Q4. What are the two segments that the labor market is divided into?

A: The labor market is divided into two sectors: the primary sector and the secondary sector.

Q5. What is a factor that is known to work toward maintaining a bridge between these two sectors of the economy?

A: Discrimination is one such factor that maintains a bridge in the labor market; immigrants, women, and minority groups are generally forced into the secondary sector.

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