Last Updated 12 May 2020

Labour Market Segmentation

Category Market
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According to Sousa-Poza, Labour Market Segmentation supposes that the labour market is made up of two or more sectors. Diversity can be observed in labour and customer markets nowadays. To attain the goals of diversity, it needs a continued, universal method as well as long-standing commitment (Bassett-Jones, 2007). From the Dictionary of Sociology (1998), it is emphasized there that this neo-classical economic theory sees a market for labour, with buyers and sellers in open competition with each other, which functions in broadly the same way as other markets.

It is recognized that labour is not a completely homogeneous commodity. That is, workers differ in their tastes and preferences for leisure rather than work and for monetary rather than non-monetary rewards. They differ also in human capital, their investment in education and training, work skills, and experience. The British economist Alfred Marshall first introduced the idea of non-competing groups in the labour-market in the 1880s.

The most significant dividing-lines have been identified as occupational, geographical, and industrial. Occupational labour-markets arise from the division of labour, increasing differentiation and specialization, with workers unable to switch between occupations requiring significantly different skills and extensive investment in training and qualifications. Nurses and doctors, for example, constitute separate occupational labour-markets, even if they work side by side in the same organizations.

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By restricting entry to an occupation, for example, by specifying the minimum qualifications and experience required, those already in it can control the supply of labour and help to push up their wages (Dictionary of Sociology. 1998). Labour-markets are also defined spatially, given that neither employers nor workers can move to another location without incurring substantial costs, as discussed in the Dictionary of Sociology (1998). As a result wages can remain high in big cities, for example, even when there are substantial numbers of unemployed in other parts of the country.

The idea of non-competing groups, as reflected in the Dictionary of Sociology (1998), has been developed much further in theories that are identified under the general label of labour-market segmentation theory. Various studies revealed that in the labour market, the people with disabilities are disadvantaged (Kirton and Greene, 2000). They remain unemployed for longer periods as compared with the rest of the working population. There should not be a ground for advantage or disadvantage within the workplace.

Labour Market Segmentation essay

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