VOLUME IV
AUTUMN 1996

DUALITY IN THE SPANISH LABOUR MARKET
 
ANA HUGUET
Universidad de Valencia
 
Draiwng on data from the Encuesta sobre Condiciones de Vida y Trabajo en España (1985), this article investigates whether the Spanish labour market performs homogeneously or, by contrast, whether there are two segments with different wage-setting mechanisms and where the entry into the preferred one is rationed. For the analysis, an endogenous switching regression model is estimated. The empirical results show a significant and positive selectivity effect in the primary segment, while human capital variables -particularly, educational level and tenure- are more rewarded in this segment. The estimation of the structural switching equation shows that the wage differential between segments exerts a substantial influence on the decision taken by the workers, whereas the key variables for the employers are the worker's years of education and his turnover rate.
 
Keywords: segmentation, wage-setting mechanisms, endogenous switching model.

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