Dual/ Segmented Labour Market Theory

International migration starts from the labour demands of modern civilisations Doesnt focus on individual decisions/ reasons, but on the pull-factors Piore (1979): permanent demand for labour in developed nations Demand driven Structural Primary sector: well-paying stable jobs (natives) Secondary sector: poorly paid jobs (immigrants)- natives reject these jobs Formal/informal High value/ Low value Demand for illegal workers could also be the case vacancies for undesired jobs could cause an influx of immigrants Core hypothesis: international migration (demand-driven) initiated through formal recruitment mechanisms. Demography of where to find labour has changed. The low wages dont increase when there is sufficient supply of workers. Reason: they are held down by social and institutional mechanisms and they are not free to respond to shifts in supply and demand. The wages may, on the contrary, fall, as a result of sufficient supply. The reasons why they do not increase do not prevent them from decreasing.

Portes and Bach: study on Cuban immigrants Had to incorporate a 3rd sector: the ethnic enclave (hard to form according to Logan et al 1994). Cubans who worked for a Cuban boss/ owner (elite immigrants). Usually most of the workers were Cuban as well. Cuban enclave: Miami, large Cuban population, demand for Cuban products Consistent with the predictions of segmented labour market theory, the researchers found that Cubans employed in the primary sector experienced significant returns to English ability, education, and experience, or education. The enclave sector, in contrast, replicated many of the features of the primary sector and provided Cuban immigrants with significant returns to education and experience. (P&B) Ethnic solidarity. Workers willing to trade low wages upon arrival for a greater chance of advancement

and independence later. Social networks- new possibilities- contact with other entrepreneurs- independent careers in small businesses. However, because they are willing to work for lower wages, this also creates a demand for new immigrants. Different pattern for men and women: Ethnic enterprise was an effective path for men, but not for women. However, they did receive higher net earning than women working in other sectors. Large cities (USA): segmented, but may be divided into three instead of two. US labour markets are segmented Immigrants excluded from primary Found disproportionately in secondary, they earn limited returns to education, skills, and experience. Immigrant enclaves: significant returns to human capital, alternative mobility ladder for immigrants. Failure of segmented labour marked research: it has not clearly linked immigration to a demand for unskilled workers arising from the intrinsic characteristics of the secondary labour market. It is not clear that labour market segmentation explains all or most of the demand for immigrants. Does not take into consideration: Wage differences Capital constraints Risk diversification