Labor Market Segmentation Theory

Labor Market Segmentation Theory suggests that the job market is divided into separate segments or tiers, such as primary and secondary markets. The primary segment includes stable, well-paying jobs with good working conditions, while the secondary segment consists of less secure, lower-paying jobs with fewer benefits. These segments operate differently, often limiting mobility between them. Factors like education, skills, and social networks influence which segment workers enter. The theory highlights that access to better opportunities is unequal, and structural barriers can trap workers in lower segments, impacting economic mobility and perpetuating inequality.