Is the Swiss Labor Market Segmented? An Analysis Using Alternative Approaches

Alfonso Sousa‐Poza
Authors registered in the RePEc Author Service: Alfonso Sousa-Poza

LABOUR, 2004, vol. 18, issue 1, 131-161

Abstract: Abstract. In this paper, three common empirical methods encountered in the segmentation literature are used in order to establish whether or not the Swiss labor market is segmented: (i) a hierarchical cluster analysis; (ii) a switching model with unknown regime; and (iii) an analysis of low‐wage mobility with a bivariate probit model with endogenous selection. According to method (i), segmentation can hardly be observed. Method (ii) shows that the Swiss labor market is dualistic in nature. Method (iii) reveals that a certain degree of persistence exists in low‐wage jobs. Whether or not the Swiss labor market is segmented thus depends on the choice of method, i.e. on the definition and understanding of segments. In any case, none of the methods used in this study point to the existence of a large and well‐defined secondary segment.

Date: 2004
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