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

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.

Getting Ahead: Educational and Occupational Trajectories of the ‘New’ Second-Generation in Switzerland

“…Young adults are more frequently upward mobile through the labour market and the groups studied did not differ significantly in the avenues through which they achieve upward mobility. Our findings are in line with previous research indicating that a fair share of mobility out of low paid jobs exists in Switzerland (Sousa-Poza 2004). Thus, the Swiss labour market provides opportunities and avenues for upward mobility, in particular for children of immigrants.…”

Low‐Paid Employment and Unemployment Dynamics in Australia*

“…Gregory and Elias (1994), for example, used longitudinal data collected from employers in the UK New Earnings Survey (NES) and found considerable mobility out of the bottom of the wage distribution, especially by younger workers. More recent studies, both in the United Kingdom and elsewhere in Europe, have further advanced our understanding of low-pay dynamics by employing statistical techniques that take into account the endogeneity of the initial wage state (Stewart & Swaffield, 1999;Cappellari, 2002;Sousa-Poza, 2004) and in, some cases, panel attrition as well (Uhlendorff, 2006;Cappellari & Jenkins, 2008a). In contrast to the earlier work based on the NES, these studies emphasised the evidence on persistence of low pay.…”

“…In contrast to the earlier work based on the NES, these studies emphasised the evidence on persistence of low pay. More recent studies, both in the United Kingdom and elsewhere in Europe, have further advanced our understanding of low-pay dynamics by employing statistical techniques that take into account the endogeneity of the initial wage state (Stewart & Swaffield, 1999;Cappellari, 2002;Sousa-Poza, 2004) and in, some cases, panel attrition as well (Uhlendorff, 2006;Cappellari & Jenkins, 2008a).…”

Reassessing Segmentation in the Labour Market: An Application for Italy 1995–2004

“…Several studies apply the Dickens and Lang (1985) approach and find differing evidence regarding labour market segmentation across an array of countries. Using two predetermined labour market segments, returns to human capital differ in the order of 1–5 percent across the segments; see Roig (1999) for Spain, Paihlè (2003) for Eastern European Countries and Sousa‐Poza (2004) for Switzerland. A similar approach to Dickens and Lang (1985) is Van Ophem (1987) who proposes logit estimation for Netherlands and finds no evidence of segmentation.…”

“…A similar approach to Dickens and Lang (1985) is Van Ophem (1987) who proposes logit estimation for Netherlands and finds no evidence of segmentation. With the exception of Sousa‐Poza (2004), existing studies which include both male and female workers document evidence of gender discrimination across the segments. Using multivariate clustering methods which differ from the switching regression approach, an array of findings exist, ranging from no segmentation (Sousa‐Poza, 2004) to as many as four different segments (Flatau and Lewis, 1993; Sloane et al , 1993; Jaoul‐Grammare, 2007).…”