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The secondary labor segment and local labor markets
Abstract
Hypotheses drawn from labor segmentation literature concerning wage determination and the labor force characteristics of the secondary labor segment are tested on three local labor markets. Samples are constructed from Current Population Surveys from 1978 and 1985 for three metropolitan areas--Los Angeles-Long Beach, Philadelphia, and San Francisco-Oakland--and the procedure of David Gordon (1986) is used to identify the secondary segment. Estimation of a model predicting segment location produced mixed results. Controlling for a number of individual characteristics, there was evidence that African-American and Hispanic workers and youth were over-represented in the secondary segment. As the secondary segment was identified in this study, there was not evidence that women were over-represented in secondary employment, but women's wages were estimated to be substantially lower in both non-secondary and secondary employment. Ordinary least squares estimation of earnings determination showed mixed support for the existence of labor segmentation with estimated returns to education significantly lower in the secondary sector in five of the six metropolitan samples and estimated returns to labor market experience significantly lower in four. However, the return to the head-of-household variable--a proxy for labor force attachment--was only significantly lower in one of the samples. Comparisons of estimated relative wages for various demographic groups indicated generally lower earnings for secondary jobs, but there were notable anomalies in the 1978 Philadelphia sample. A switching model with known regimes was employed to test and correct for potential selection bias in ordinary least squares estimation of the earnings structure. Estimates obtained from a conventional modelling of selectivity provided limited and inconsistent evidence of selection bias and suggested the limited appropriateness of the model. The study includes consideration of factors which may have contributed to the inconsistency of the results, including data limitations, segment misclassification, and the conceptualization of race and ethnicity and gender relations within a static model of labor segmentation.
Subject Area
Labor economics
Recommended Citation
Kitchel, Marc C, "The secondary labor segment and local labor markets" (1990). Doctoral Dissertations Available from Proquest. AAI9110169.
https://scholarworks.umass.edu/dissertations/AAI9110169