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Citation Information

Type Journal Article
Title Testing for labour market duality: the private wage sector in Cote d'Ivoire
Publication (Day/Month/Year) 1990
URL http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/03/31/000178830_98101902​173076/Rendered/PDF/multi_page.pdf
Research on labor market duality, in the context of developing countries, has identified the secondary segment of the labor market more with the self-employed than with salaried employees. This derives in part from the vagueness of the demarcation line between the two sectors of the labor market: the various descriptions of the duality theory are less than specific about wage workers. The wage sector has not entirely escaped attention, but, until recently, tests for the existence of labor market duality lacked rigor. A few recent tests derive information on the existence of duality and the relative magnitudes of the primary and secondary sectors entirely from the structure of the wage equation. These tests are implemented in this paper on data from C6te d'Ivoire. Furthermore, as an innovation relevant to the current state of the art, this paper estimates an indicator of the degree of formality of the job that a worker holds, and integrates this indicator into the structure of the wage equation. The information on which the indicator is built relates to job characteristics that are often thought to distinguish the primary from the secondary sector.The indicator is found to have some effect on the structure of the wage equation which therefore suggests the existence of \"duality,\" even though duality is measured by the indicator as a continuum, rather than as a dichotomous split. Analysis of the spread of the indicator reveals a single mode in adistribution that can be viewed as the mixture of two normal distributions.Thus, the Ivorian labor market is one with a primary and a secondary pole, and with substantial overlap between those poles so as to deny the rigorous separation that is common in discussion about labor market duality

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