Economic Dualism: A Critical Review

In this paper we examine the model underlying the dual economy approach to labor market segmentation. We provide a specification of the components of the model as well as the linkages between components. This construction of the underlying model allows us to evaluate it systematically as a model, to consider and to evaluate each component and linkage separately. While we conclude that there are several important contributions to retain from the dual approach, including the insight that capital structure conditions labor market outcomes, we argue that it is inadequate for sustaining theoretical and empirical development. As a new starting point for the study of economic and labor market segmentation we suggest a resource perspective which retains insights from the dual approach but avoids its overly restrictive assumptions.