Sociology Plus
Dual Labor Market Definition
The dual labor market is the idea that the economy contains two separate sectors of work between which there is little movement: a primary sector of secure, full-time employment for permanent workers, and a secondary sector composed of temporary and part-time workers in insecure, low-paid jobs.
Origins of the Concept
The concept of labor market dualism was first developed by institutionalist economists critical of conventional analyses of the labor market (Peck 1996). They observed that different categories of workers faced contrasting management policies: white male workers were preferentially recruited to jobs offering training, pay gains, promotion, and security — access to organizational job ladders constituting “internal labor markets” governed primarily by organizational rules — while women and minority ethnic groups were generally confined to the external labor market of insecure, low-paid jobs without internal training or promotion prospects. This analysis contested neoclassical models in which individual workers are allocated across a spectrum of jobs according to skills and preferences, emphasizing instead how organizational structures and management decisions generate primary and secondary labor markets operating according to different logics.
Explaining Dualism
Dual labor market theorists differed over the organizational logic of dualism. Some linked it to the contrast between large oligopolistic employers and small competitive firms. But since large employers themselves differentiate between primary and secondary workforces, others argued that managers construct primary labor markets to retain relatively skilled workers, especially after investing in firm-specific training. Radical commentators suggested dualism often resulted from management tactics of divide and rule rather than technical calculations about protecting training investments.
The Flexible Firm and Its Critics
These analyses were designed chiefly to explain the persistence of dualism, but recent organizational restructuring has reduced stable career routes and expanded less secure employment (Grimshaw et al. 2001), while skills shortages and equal-opportunities policies have opened some doors to qualified but previously excluded groups. One dualist analysis addressed to change was the “flexible firm” model, contrasting core “insiders” providing functional flexibility with peripheral “outsiders” — part-time, temporary, and subcontract workers — providing numerical flexibility (Kalleberg 2003). The core experienced horizontal movement within teams more than vertical advancement. The model was criticized, however, for being more prescription than analysis — recommending that employers and the state codify employment practices along these lines — and for (1) imputing coherent strategy to management when policies are often ad hoc, reactive, and constrained; (2) conflating distinct forms of numerical flexibility (part-time, casual, consultancy) with very different implications for those involved; and (3) ignoring substantial sector differences (Pollert 1988).
From Dualism to Segmentation
Debates since the 1980s have produced more complex analyses of labor market segmentation (Rubery and Wilkinson 1994; Peck 1996), identifying multiple segments rather than a simple dualism: professional and managerial segments with vertical progression within and between employers; semi-professional and craft segments with predominantly horizontal moves between relatively secure positions; white-collar and manual segments with modest internal job ladders; relatively secure non-career jobs often associated with part-time work; and persistently insecure employment. These segments are not fixed but continually modified and remade — shifting clusters of opportunity and insecurity, sometimes linked to changing sources of labor supply, rather than a uniform slide into flux. Underpinning such analyses is attention to the social organization of both labor demand (where management decisions are pivotal) and labor supply (where changing family and household relations are central), with state policies structuring both — a framework that illuminates differences in how labor markets are organized and regulated across time and between states embedded in distinctive institutions of capitalism.