DETERMINANTS OF EMPLOYEES' MOVEMENT BETWEEN LABOUR MARKET SEGMENTS

Abstract

The paper studies upgrading patterns between secondary and primary segments in Polish labour market, with reference to the Segmented Labour Market theory. The type of contact (permanent vs. fixed-term) and wage distribution were used within one framework to define these labour segments. The parameters of binary choice model, based on Labour Force Survey microdata, were estimated to calculate the probabilities of shift from secondary to primary segment, and to identify supply and demand-side determinants of this upgrading. The results are, in general, in line with the trap hypothesis, pointing out to limited chances of upward shift from secondary to primary labour segment. However, this upward mobility has increased in recent years, being a result of changes in real (measured by lowering unemployment rate) and institutional sphere of the Polish labour market. Individual’s age, education attainment, propensity to invest in human capital, as well as the size of an enterprise appeared to be the most important divers of inter-segments upgrading. Moreover, regional as well as sectoral differences in probability of upgrading were identified – this probability was higher in the case of workers living in regions with large agglomerations and close proximity to the German labour market.