According to the segmentation theory, low-skilled jobs belong to the secondary sector of the labour market. Low-skilled jobs do not require vocational training and workers are interchangeable. Therefore, workers in this sector have poor working conditions and are regularly affected by employment...

Who are more exploited, high-skilled or low-skilled workers? We address this question using the efficiency wage model with skill differentials incorporated. We perform simulations to find the Nash equilibrium numerically, and our central results are the following. First, higher-skilled workers...

A large literature suggests that incentive pay and delegation of worker authority are positively related. Using data from a large cross section of British establishments, we show that the positive relationship found in the empirical literature masks a stark difference across jobs. Classifying...

We construct a search matching model, which incorporates endogenous labour market participation into the segmented labour market by combining the models of Albrecht and Vroman (2002) and Garibaldi and Wasmer (2005) to investigate how to raise the labour force participation rate in the segmented...