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Theoretical Approaches to Segmented Labour Markets

Raymond Loveridge (Professor of Manpower Management, University of Aston Management Centre)
Albert Mok (Professor of Sociology, Department of Social and Political Sciences, University of Antwerp, Visiting Professor, University of Aston Management Centre)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 1 July 1980


In neo‐classical economic theory labour is a commodity and the ultimate value of the employer's services is determined by the sales value of the product of these services: the cost of supply reflects both the disutility of work for the recruit and his equalisation of net advantages between jobs. For modern labour economists the assumption that entrepreneurs require identical inputs of labour and the new recruits will therefore possess similar skills (the conditions of free competition) is an unrealistic one. Hence segmental labour market theory has grown out of the need to explain differences between shared needs and commonalities within each group of consumers (employers) on the one hand and suppliers (employees) on the other. In this way it has been possible to carry on assuming the existence of perfect competition on both sides of the market within the boundaries of labour markets thus defined.


Loveridge, R. and Mok, A. (1980), "Theoretical Approaches to Segmented Labour Markets", International Journal of Social Economics, Vol. 7 No. 7, pp. 376-411.




Copyright © 1980, MCB UP Limited