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The critique of the neo‐classical theory of the labour market has been growing in strength in recent years. Two main strands can be identified. The American traditions emphasise the role of the production process of firms or industries, either in terms of its task requirements (Doeringer and Piore 1971), or the mode of labour process control (Edwards 1979). The British tradition emphasises the role of trade unions and the character of the industrial relations system (Rubery 1978; Nolan 1983). By looking at one industry — construction — and thereby controlling for production process and industrial relations system, this article suggests that firm type, in interaction with the product market, is also an important factor in generating non competing labour markets.

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