Segmentation of the Labor Market: Rejoinder
The comment by John Barron constitutes a very interesting extension of earlier work rather than a correction of it. He introduces the additional dimension of searching firms to find vacancies. The earlier work had concentrated on the searching of vacancies to find job offers. Clearly both are relevant and, not surprisingly, he finds that when different assumptions are made, different conclusions follow. He introduces the concept of mean (firm) search time T to find a particular firm with a vacancy in a given set of firms. Assuming random search, this time depends on the number of firms in the set. Thus, he finds that when a labor market is divided into N equal compartments, mean search time in each compartment is reduced by a factor of (1/N). The earlier work to which he refers implicitly assumed that the vacancies in a compartment could be located fairly readily. The hiring firms could be easily located but time consuming search was required to determine the particular vacancies which would produce job placements for particular workers. Thus, the relevant search time measure is the mean (vacancy) search time to locate a placement from the set of vacancies in the
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