Search behaviour and casualties of the (dual) labour market

Human capital theory predicts that job search will hand low wage employees the opportunity to improve their labour market position. Labour market segmentation theory argues that once a worker is locked into the secondary labour market, there is limited opportunity to escape to the primary segment. In this regard, search behaviour from secondary workers might be fuelled by fear of future job loss. We use the Australian HILDA surveys to analyse search behaviour of employed workers from this perspective, which is novel in the context of dual labour market theory. Our findings are consistent with labour market segmentation theory. In the primary labour market, job search leads to an improved labour market position, whereas in the secondary labour market, it does not. Finally, putting the unemployed under pressure to find employment, without providing them with realistic job opportunities on the demand side, does not improve their chances of finding employment