INTERNAL LABOUR MARKETS FOR ENGINEERS IN BRITISH INDUSTRY*
| Date | 01 March 1979 |
| Published date | 01 March 1979 |
| DOI | http://doi.org/10.1111/j.1467-8543.1979.tb00626.x |
| Author | John Mace |
INTERNAL LABOUR MARKETS FOR ENGINEERS IN
BRITISH INDUSTRY*
JOHN
MACE^
ALL
labour market analysis focuses on the processes by which the pricing and allocation
of labour are determined, and typically such analysis has taken place within a competi-
tive framework.’ However, this framework, at least earlier formulations
of
it, proved
unequal to the task of explaining apparent discrepancies between observed wage
patterns and those predicted by competitive theory. The inadequacy
of
earlier formula-
tions
of
the model has resulted in two parallel developments. The first
of
these has
consisted
of
modifying and refining the original theory to explain the observed dis-
crepancies. Outstanding examples
of
these refinements are to be found in human capital
and in search theory2
The second development has been
of
alternative models to explain the determination
of
wages and allocation
of
labour. Some
of
these alternative explanations have been
within the Marxist tradition, others such as the ‘job competition model’ and the ‘internal
labour market (I.L.M.) model’ have not.3
Because these alternative models constitute an important challenge to orthodox
theory, it
is
important that some attempt, even
if
a somewhat provisional one, should be
made to assess their validity. The intention
of
this paper is to do this with respect to the
I.L.M. model.
In
the first section the I.L.M. model will be delineated, and previous
studies
of
1.L.M.s will be considered. This will be followed by a critical discussion
of
the
criteria that need to be satisfied
to
establish the presence
of
1.L.M.s. In the third section
these criteria will be applied to a sample of
500
engineers from twelve British firms. In
the concluding section some implications
of
the findings will be discussed.
For
the purposes
of
this study an engineer was defined as a person who held an
engineering qualification
of
degree level
or
who was employed in a job requiring
engineering skills
of
degree level (see Appendix
for
fuller definition). This fairly wide,
and overlapping, definition was necessary in order properly to understand the operation
of
1.L.M.s
in
the firms examined.
I.
THE
‘I.L.M.
MODEL’
Clerk Kerr4 was one
of
the first economists to develop the concept of the
I.L.M.
In his
work he referred
to
a ‘manorial’ labour market structure characterised by
jobs
which
‘are specifically delimited, and (where) entrance into them, movement within them and
exit from them are precisely defi~ied’.~ These labour market structures were termed
‘enterprise specific markets’
or
1.L.M.s by Doeringer and Piore: who have developed
the theory of the I.L.M. and its implications for manpower analysis in their
book,
Internal Labour Markets and Manpower Analysis.
Doeringer and Piore argue that
1.L.M.s
are the consequence
of
a number ofcomple-
mentary forces. One such relates to the cost
of
turnover to employers and to workers.
To
the employer these costs take the form
of
recruitment, screening and training. The
employee will also incur certain search costs and, in addition, psychic costs, for example
fear
of
losing his job. A second factor in the generation
of
I.L.M.
structures is the
influence of trade union
or
staff associations, which attempt to protect and enlarge the
job security
of
employees. The personnel practices
of
firms will develop into customs,
*
I
am grateful
to
Mark Blaug, Ellie Mace and an anonymous referee for their comments
on
an
earlier draft of this paper.
t
Lecturer in
the
Economics
of
Education at the University
of
London Institute
of
Education.
50
To continue reading
Request your trial