Labor Market Segmentation: To What Paradigm Does It Belong?

The dictionary defines a paradigm as "a model or pattern. In grammar, an example of a conjugation or declension, showing a word in all its inflectional forms." A paradigm is thus a practical example which perfectly illustrates an abstract principle. Its hallmark, in this dictionary definition, is the complete correspondence between the abstract and the applied, between theory and praxis. The term was adapted to the discussion of scientific theory by Thomas Kuhn, and its current vogue in economics is attributable directly to his book. As Kuhn used the term, paradigm retains its double meaning of theory and of praxis, but the relationship between the two becomes ambiguous. Scientists believe, Kuhn seems to argue, that their inquiry is based upon a theory of how the world operates and how the investigation of its operation ought to proceed. But "normal science" is in fact largely a set of practices in which members of a given scientific community customarily engage. Students seeking to follow their professors in careers in which the latter will judge them and ultimately determine their fate are not encouraged to andertake projects which depart radically From those which their professors conceive For them. When suggestions for such projects trise, either from students or competing nembers of the community, they are as often reated by sarcasm and ridicule as the subect of seasoned discourse and debate. In this )rocess, what students acquire is less an abtract understanding of what they are doing han a set of habits, or instincts, about what constitutes a legitimate mode of inquiry or a plausible explanation. The disjuncture between theory and practice which arises in this way creates the potential for a "scientific revolution." To ask in this context about the paradigm to which notions of labor market segmentation belong is thus to ask a question about the relationship between that mode of research and the theory and practice of normal economics. I never considered myself a revolutionary; indeed quite the contrary. But as an exponent of labor market segmentation in the community of "normal" economics, I can assure you that labor market segmentation does not fit the paradigm. The sentiments and reactions which Kuhn tells us greet the abnormal and aparadigmatic in a discipline, that is, fury, disdain, resentment, sarcasm, and condescension have definitely greeted labor market segmentation. This is a matter of fact; an observation about praxis. The question is then what aspect of the conceptual structure of the discipline accounts for this practical result. In most discussions, labor market segmentation is contrasted with human capital theory, but this does not account for the hostile reception it has received. It fails, first, because the treatment accorded market segmentation by the profession is not that different from the treatment accorded human capital when it first appeared. Gary Becker describes his personal experience on this score in the introduction to his book of essays, The Economic Approach to Human Behavior, and the disdain and antagonism which he attributes to his colleagues are at least as great as anything experienced by the proponents of segmentation. But, perhaps more fundamentally, the two views are not, as we shall see shortly, necessarily in conflict. *Professor of economics, Mitsui Professor for Probems of Contemporary Technology, Massachusetts Intitute of Technology.