Labour Market Segmentation: Standard and Non-Standard Employment in Germany

Data from the German Socio-Economic Panel provide insight into the relationship between standard and non-standard work, from the perspective of dual labour market theory. We identify two segments that largely correspond to the common distinction between these forms of employment and find substantial differences in the determination of wages, as well as the composition of worker and job characteristics. These differences tend to increase after the Hartz reforms. The estimates also indicate the existence of a primary sector wage premium and job rationing, as well as specific patterns of labour mobility due to (partly non-economic) barriers between segments.