An empirical approach on labour segmentation. Applications with individual duration data

a r t i c l e i n f o This article proposes empirical tools to account for the role of heterogeneities in the labour matching process, and shows an application to the Andalusian labour market which relies on individual data. The central idea of the paper is that the labour market is segmented, and this segmentation can be treated empirically by grouping workers, jobs and matches into labour groups according to their characteristics. In a segmented labour market the probability that a match occurs in a particular job group affects the probability that a match occurs in a particular worker group or vice versa. We propose two empirical measures related to this idea: propensity to match, and segmentation in worker and job groups. The usefulness of this empirical framework is shown by its application to different labour market analyses. Firstly, we use a clustering methodology, based on a similarity measure, to obtain a better overview of the structure of the labour market. Secondly, we propose a measure of mobility based on our similarity measure, and estimate a regression model that relates mobility to worker and job characteristics and to the economic cycle. Finally, these tools are included in an unemployment duration model. The proposed methodology may be useful in labour intermediation by helping seekers to follow a 'roadmap' of successful paths. In the labour market, workers seeking jobs and vacant jobs offered by employers are heterogeneous in aspects as skills, geographical location, gender, age, payment, working time, attitude, taste, and many others. These heterogeneities lead to the concept of mismatch: " Mismatch is an empirical concept that measures the degree of hetero-geneity in the labour market across a number of dimensions, usually restricted to skills, industrial sector, and location. Large differences in the skills possessed by workers and those required by firms would lengthen the time that it takes to match a given group of workers to a given group of firms, as agents search for a good match among the heterogeneous group. Industrial sector matters in matching because of industry-specific skills that may not be picked up by generally available measures of skills. Finally, location influences matching because of imperfect labour mobility. " (Petrongolo and Pissarides, 2001, 399–400). The main objective of this paper is to propose, from an empirical perspective , new variables to control for heterogeneities and segmentation in the labour matching process. We begin …