Labour Market Segmentation

One of the key labour market developments observed throughout the world in recent years is the phenomenon of labour market segmentation: the division of the labour market into separate sub-markets or segments, distinguished by different characteristics and behavioural rules. Segmentation may arise from particularities of labour market institutions, such as governing contractual arrangements (segmentation along permanent/temporary nature of employment contracts), from lack of enforcement (segmentation along formal/informal line), as well as types of workers concerned (such as migrant and non-migrant workers). Research and advice on the topic of segmentation aim at identifying key labour market segments across countries, degree of transitions between various segments, consequences of segmentation for equity and efficiency of labour market outcomes, and viability of policies aimed at alleviating negative consequences of segmentation.