| dc.description.abstract | The theory of labour market segmentation represents an assault
on the conventional tenets held by the neoclassical school of labour
economics. Essentially, the segmentation approach views the economic
structure of the labour market as consisting of distinct sectors
within which workers operate under fundamentally different rules and
conditions, affecting both the distribution of employees among jobs,
as well as the distribution of wages. These sectors act as barriers
which prevent competitive forces from narrowing wage and earnings
differentials. As a result, segmentation theory sees the poverty of
the working poor as being mostly the fault of the economic system, as
opposed to the individual workers themselves.
This study empirically examines the importance of non-competing
labour markets for males in Canada, as hypothesized by a refined
version of labour market segmentation theory. Using survey data from
the Canadian National Mobility Study, semi-logarithmic earnings
equations for each identified segment are specified and tested. The
results produced demonstrate that statistically significant differences
in labour force earnings are for the most part, present across both
occupational and industrial labour market sectors. Specifically,
differences in earnings were found across the primary upper tier and
secondary segment within both the core and periphery sectors. In
addition, substantial variation was also present across the core and
periphery sector's primary upper and lower tiers. Overall, these findings are interpreted as evidence which both support and extend
the hypothesis that Canadian labour markets are segmented.
In consequence, past public policies which solely emphasized
labour supply adjustments through human capital development have failed
in improving the earnings and working conditions of disadvantaged
workers because in themselves, they have not assisted those in the
secondary and periphery segments to enter the primary and core sectors.
Hence, a re-direction of policy which addresses the structural aspects
of labour demand is required in order to remove the labour market
barriers created by segmentation. Ultimately, a combination of both
labour supply and demand policies are needed if we are to expect
significant improvements in the earnings capacity of disadvantaged
workers in Canada. | |
