Dualism in Labor Market: The Case of the Financial Sector in Turkey

Abstract

Dual labor market hypothesis developed in the 1960s asserts that labor markets consist of primary markets with good conditions in respect to earnings, promotion and working conditions and secondary markets with low yield, poor working conditions and low unionization and insurance coverage. Human capital investments yield high-yield in the primary markets with qualified jobs and yield of the human capital investments are low in secondary jobs for the reason that they require fewer qualifications. The studies to date from that period show that differences in labor market have not disappeared with the competitive operation of market mechanism as claimed by orthodox theory, but have further deepened. In this study, earnings and income differences between three groups involved in the financial markets under criteria of The Statistical Classification of Economic Activities in the European Community (NACE Rev.2) are examined within the scope of the dual labor market theory.

According to Household Labor Force Survey data of 1504 financial employee data, the existence of two separate markets, which have statistically significant differences in terms of earnings, education and social security, is revealed.