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The objective of this paper is to examine the operation of individual labour markets from the point of view of possible government intervention. The first section sets out a theoretical framework describing the operation of individual labour markets, while the second section develops a two-stage approach for identifying the sources of persistent imbalances in particular labour markets. The third section applies the proposed approach to three occupations in the Toronto area : auto mechanics ; sewing-machine operators ; and packaging hands. Alternative approaches by government are suggested for dealing with these imbalances.