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A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination, and Keynesian Unemployment
Abstract
This paper develops a model of dual labor markets based on employers' need to motivate workers. In order to elicit effort from their workers, employers may find it optimal to pay more than the going wage. This changes fundamentally the character of labor markets. The model is applied to a wide range of labor market phenomena. It provides a coherent framework for understanding the claims of industrial policy advocates. It also can provide the basis for a theory of occupational segregation and discrimination that will not be eroded by market forces. Finally, the model provides the basis for a theory of involuntary unemployment.
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Citations
Cited by
Who Benefits from State and Local Economic Development Policies?
Bartik, T. J. (1991) · doi:10.17848/9780585223940 · Cited by 2,643
Brock, W. A., & Evans, D. S. (1989) · Small Business Economics · doi:10.1007/bf00389913 · Cited by 894
Is There Less Discrimination in Occupations Where Recruitment Is Difficult?
Baert, S., Cockx, B., Gheyle, N., & Vandamme, C. (2015) · ILR Review · doi:10.1177/0019793915570873 · Cited by 243
Valletta, R. G. (1999) · Journal of Labor Economics · doi:10.1086/209947 · Cited by 164
Kaufman, B. E. (2010) · ILR Review · doi:10.1177/001979391006400104 · Cited by 122
Metadata
- Authors
- Bulow, J. I., & Summers, L. H.
- Venue
- Journal of Labor Economics
- Publisher
- University of Chicago Press
- Published
- 1986-07
- Volume
- 4
- Issue
- 3, Part 1
- Pages
- 376-414
- ISSN
- 0734-306X (ISSN-L)
- 1537-5307
- OpenAlex
- W1595242268
- Cited by
- 465
- References
- 0
- FWCI
- 56.03
- Type
- journal article
- Language
- en
- Open access
- closed
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Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
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How to cite
Cite CoChat for the checks on this page, and the paper for its own findings.
- This page
- CoChat. (2026). Citation check: A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination, and Keynesian Unemployment. https://app.cochat.ai/papers/10.1086/298116
- The paper
- Bulow, J. I., & Summers, L. H. (1986). A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination, and Keynesian Unemployment. Journal of Labor Economics. https://doi.org/10.1086/298116
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
