New Forms of Dualization? Labour Market Segmentation Patterns in the UK from the Late 90s Until the Post-crisis in the Late 2000s

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Yoon, Yeosun ; Chung, Heejung (2015)

There has been an increase in literature that examines the patterns of dualization in labour markets across different welfare states. However, rarely do these studies empirically explore how labour markets are divided. Rather they assume a certain type of division to exist in a market, and apply this assumption to measure the extent to which this division can be observed. This paper aims to overcome this limitation by examining the labour market dualization patterns of the UK’s employed population over the past decade through a latent class analysis model. Our analysis shows that the UK labour market could be characterised by a three group system during the period between 1999 and 2010. This divide supports the theoretical literature on labour market divisions in that there are clear distinctions between those who are insiders and those who are not. However, what is interesting is that rather than having a dichotomised pattern of division of insiders and outsiders, we find a third group which can be characterised as a “future insecure” group. What is more, the main characteristics that divide the groups are not contract types (involuntary part-time or temporary employment), but rather income levels (low pay), occupational profile (low-skilled occupations) and social security benefits stemming from employment (occupational pension coverage). From the results, we conclude that the patterns and characteristics of labour market divisions may not be generalised and further empirical investigations are needed to understand the cross-national variations.
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