TY  - JOUR
AU  - Bulow,Jeremy I.
AU  - Summers,Lawrence H.
TI  - A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1666
PY  - 1986
Y2  - December 1986
UR  - http://www.nber.org/papers/w1666
L1  - http://www.nber.org/papers/w1666.pdf
N1  - Author contact info:
Jeremy I. Bulow
Stanford University
Graduate School of Business
Stanford, CA  94305-7298
Tel: 650/723-2160
Fax: 650/725-8916
E-Mail: jbulow@stanford.edu

Lawrence H. Summers
Harvard Kennedy School of Government
79 JFK Street
Cambridge, MA 02138
Tel: 617/495-9322
Fax: 617/495-0436
E-Mail: lhs@harvard.edu
AB  - This paper develops a model of dual labor markets based on employers' need to motivate workers. In order to elicit effort from their workers, employers may find it optimal to pay more than the going wage. This changes fundamentally the character of labor markets. The modelis applied to a wide range of labormarket phenomena. It provides a coherent framework for understanding the claims of industrial policy advocates. It also can provide the basis for a theory of occupational segregation and discrimination which will not be eroded by market forces. Finally, the model provides the basis for a theory of involuntary unemployment.
ER  -