Segmented Labour Markets

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    Segmented Labour Markets

    • There are barriers that exist to the free movement of workers between different sections of the labour market
      • In reality, there are also a number of different labour markets
    • If there were no barriers to entry of exit in labour markets, workers would move from low-wage jobs to high-wage jobs, which would equalise wages.
    • However, some barriers to entry increase efficiency of labour markets
      • For example, one would want a surgeon to be fully qualified, and one would want a taxi driver to have a license.
    • Some barriers, however, may be unnecessary and could be used to just push up particular workers’ wages.

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