Subcontracting and the Creation of Inequality in the Dutch Clothing Industry 1980-1992

The paper analyzes a dual industry structure and its effects as hypothesized by segmentation theory. A dual industry structure refers to the simultaneous existence of two groups of firms within an industry which differ in terms of bargaining power and product and labor market performance: sales and job fluctuation levels should be higher in the dominated group, and job security lower. Empirical analysis of the clothing industry in the Netherlands for the period 1980-1992 confirms the hypotheses for the largest part. JEL classifications: J42, L14, L11