Labour Market Outsiders Research Articles

Labour-Market Outsiders, Italian Justices and the Right to Social Assistance

Constitutional right to social assistance in Italy – Lack of a universally-accessible, albeit conditional and means-tested, scheme against absolute poverty – Separation of powers – Textualism – Framers’ original understanding – Living constitutionalism and courts’ relationship with public opinion – Italian, EU and international constraints on citizenship and duration-of-residence requirements – Fiscal sustainability

Inclusive Unions in a Dualized Labour Market? The Challenge of Organizing Labour Market Policy and Social Protection for Labour Market Outsiders

AbstractDynamics of labour market dualization have affected most Western European countries over the last two decades, and trade unions have often been seen as conservative actors protecting the interests of their core constituencies and as such contributing to labour market dualization. However, empirical evidence from Italy shows that unions' stance towards atypical workers has been more inclusive than the literature expected, despite the conditions for pro‐insider policies being firmly in place. By analyzing unions' strategies towards temporary agency workers in Italy, the article aims to reconcile the empirical observations that conflict with the theoretical expectations. It is argued that unions have indeed put in place inclusive, yet selective, policies towards atypical workers, and that unions' identity is a central explanatory variable to understand unions' selective inclusiveness.

Outsiderness and Participation in Liberal and Coordinated Market Economies

The number of labour market outsiders in Europe has dramatically increased, especially among the youth, potentially influencing social and political participation. Using logistic regressions and comparable survey data – the British Household Panel (BHPS) and the German Socio-Economic Panel (GSOEP) – we connect insights drawn from Varieties of Capitalism and dualization literature with an investigation of individual level outcomes in Britain and Germany. First, we disentangle the impact of skills on outsiderness among the overall population and the youth. Second, we analyse the influence of skills and outsiderness on peo-ple’s social and political participation. We suggest that skills matter in protecting individuals from labour market outsiderness, but they do so in different ways across liberal and coordinated market economies and age groups. While the possession of specific skills reduces the likelihood of being a labour market outsider among young people, it has the opposite effect on political participation. In contrast, education fosters participation but does not reduce the risk of becoming an outsider in the same age cohort. Moreover, although there is no difference between insiders and outsiders when it comes to political par-ticipation, being an outsider may reduce social participation. Finally, young people are more likely to be excluded from social and political participation in Britain than in Germany as a consequence of different welfare and socio-economic systems

Ethnic Enclaves and Self-employment among Middle Eastern Immigrants in Sweden – Ethnic Capital or Enclave Size?

We employ geocoded data to explore the effects of ethnic enclaves in Swedish cities on the propensity of Middle Eastern immigrants to use business ownership as a vehicle to transcend from labor market outsiders to insiders. We demonstrate a robust tendency for immigrants to leave non-employment for self-employment if many co-ethnic peers in the enclave are business owners, while we observe weak effects emanating from business owners in other groups. Net of these effects, overall enclave size, measured by the local concentration of co-ethnic peers, has a negative influence on the propensity for an outsider to become self-employed.

Welfare Attitudes in Portugal Before and after the Financial Crisis

Do attitudes towards the welfare state change in response to economic crises? Addressing this question is sometimes difficult because of the lack of longitudinal data. This article deals with this empirical challenge using survey data from the 2008 European Social Survey and from our own follow-up survey of Spring 2013 to track welfare attitudes at the brink and at the peak of the socio-economic crisis in one of the hardest hit countries: Portugal. The literature on social policy preferences predicts an increased polarisation in opinions towards the welfare state between different groups within society – in particular between labour market insiders and outsiders. However, the prediction has scarcely been tested empirically. A notoriously dualised country, Portugal provides a critical setting in which to test this hypothesis. The results show attitudinal change, and this varies according to labour market vulnerability. However, we observe no polarisation and advance alternative explanations for why this is so.

Dualising activation. Responses to unemployment and mental health-related disability retirement in Finland at the turn of the millennium

ABSTRACT‘Activation’, referring to measures that increase the labour supply, has recently been a key concept in discussing employment in the developed countries. This paper analyses the motivations behind activation measures targeted at the unemployed as well as persons disabled due to mental health problems, as expressed through legislation and national policy documents following the 1990s recession in Finland. The analysis points out that the activation measures implemented in Finland at the turn of the millennium have had a tendency to reinforce ‘dualisation’, that is, to polarise citizens as either labour market insiders or outsiders. The analysis shows that activation also involves labels that fix blame on the people themselves for their situation. Hence, the activation measures have increased the risk of exclusion for many of the persons they were supposed to help. The results are discussed in the context of the broader literature on the Nordic welfare and labour market model.

Public policy-making and risk profiles: Scandinavian centre-right governments after the turn of the millennium

Recent theoretical advances in the welfare state literature have outlined the differences between labour market- and life course-related schemes as centre-right parties have difficulties in enacting retrenchment on life course-related schemes because these concern every voter. In contrast, the textbook risk profile of centre-right parties’ electorates allows them to cutback on labour market-related schemes as these parties get negligible support from workers and low-income voters. Conducting a comparative case study of recent Danish and Swedish centre-right governments, this article analyses the stylized assumptions on the party level by comparing two similar centre-right governments, which differed in their voter coalitions’ risk profile. I first argue that centre-right governments are generally constrained by the popular entrenchment of the universal welfare state when it comes to life course-related welfare schemes. Second, I argue that the leeway on labour market-related schemes is contingent on the actual risk profile of the centre-right’s electorate, and thereby move beyond the stylized assumptions from recent literature. In this respect, the Danish centre-right did, in contrast to its Swedish counterpart, gain power with an unusual high support among working-class voters which constrained its latitude on labour market-related schemes. I find that the Danish centre-right governments after 2001 acted with bound hands thanks to its high working-class backing, and refrained from outright cutbacks on both labour market- and life course-related schemes until 2010 except for labour market outsiders. In contrast, the Swedish centre-right had a much lower working-class backing and therefore engaged in some outright cutbacks of labour market-related schemes such as unemployment benefits directly after taking office 2006. The centre-right’s actual voter coalition’s risk profile is thus an important determinant for its public policies and its leeway for policy-seeking.

Inclusive Unions in a Dualised Labour Market? The Challenge of Organising Labour Market Policy and Social Protection for Labour Market Outsiders

Dynamics of labour market dualisation have affected most Western European countries over the last two decades and trade unions have been often seen as conservative institutions protecting the interests of their core constituencies and as such contributing to labour market dualisation. However, empirical evidence from Italy shows that unions’ stance towards atypical workers has been more inclusive than the literature expected, despite the conditions for pro-insider policies being firmly in place, and unions have emerged as important actors in the organisation of social protection for labour market outsiders. By analysing unions’ strategies towards temporary agency workers in Italy through a disaggregated approach (i.e. focussing separately on salary and job protection; active labour market policies; and income protection), I reconcile the empirical observations that conflict with the theoretical expectations. I argue that unions have indeed put in place inclusive, yet selective, policies towards atypical workers and that unions’ identity is a central explanatory variable to understand the puzzling coexistence of a dualised labour market and (selectively) inclusive unions. Through a disaggregated identity-bound analysis of unions’ strategies, I shed new light on the complex relationship between labour market dualisation and the dualisation of social protection. In particular, findings suggest that paradoxically unions’ strategies to counteract labour market dualisation may be furthering the insider-outsider divide in terms of social protection. I also suggest that a clearer analytical distinction between labour market dualisation and welfare dualisation is needed in future research and that the understanding of unions’ strategies towards marginal workers would greatly benefit from a systematic disaggregated analysis of unions’ agency.

A Study on the Politics of Labour Market Dualisation in South Korea: Who the Labour Market Outsiders Are

A Study on the Politics of Labour Market Dualisation in South Korea: Who the Labour Market Outsiders Are

High-skilled outsiders? Labor market vulnerability, education and welfare state preferences

Recent research has established that employment risk shapes social policy preferences. However, risk is often conceptualized as an alternative measure of the socio-economic status. We show that employment risk and socio-economic status are distinct, cross-cutting determinants of social policy preferences. More specifically, we analyze the policy preferences of high-skilled labor market outsiders as a cross-pressured group. We first establish that labor market vulnerability has spread well into the more highly educated segments of the population.We then show that the effect of labor market vulnerability on social policy preferences even increases with higher educational attainment. We conclude that that labor market risk and educational status are not interchangeable and that the high skilled are particularly sensitive to the experience of labormarket risk. Thereby, our findings point to a potential cross-class alliance between more highly and lower skilled vulnerable individuals in support of a redistributive and activatingwelfare state. Thus, they have far-reaching implications for our understanding of both the politicization of insider/outsider divides and the politics of welfare support.

The Impact of Labour Market Reform Policies on Insiders’ and Outsiders’ Low-Wage Risk

Taking a cross-national comparative perspective, this study analyses differences in individual determinants of the low-wage risk across institutional settings. It builds on previous research that dealt with the impact of labour market reform measures on the distribution of labour market risks in advanced economies. It is widely held that such reforms have a particularly adverse effect on labour market outsiders, specifically on entrants to the labour market. We seek to differentiate this assumption and to show that this presumed effect is conditional on the configuration of the bargaining system. Using hierarchical models that match EU Statistics on Income and Living Conditions (EU-SILC) microdata with several macro indicators for 20 countries, we find that, in contexts with a high degree of bargaining centralization, the relative low-wage risk of entrants and re-entrants from inactivity increases with commodification and deregulation. If bargaining is decentralized, however, the effects of labour market reform policies on insider/outsider disparities are marginal. Additionally, we show that the same still holds true if a measure of employment protection legislation (EPL) is regarded as the moderating institutional filter. We explain these findings with theoretical concerns based on the concept of closure. These predict that centralized bargaining structures and high EPL (or, rather, closed employment relationships) will systematically channel risks produced by reform measures to the periphery of the labour market.

The party preferences of atypical workers in Germany

Are party preferences of atypical workers distinct from those in stable employment? The welfare state literature debates this question, but very few empirical studies have been conducted. We examine the German case, being an example of a welfare state with strong social insurance traditions where the rise of atypical employment has been conspicuous. In particular, we test the argument that preferences of labour market outsiders may not differ because outsiders share households with insiders. We find that labour market status significantly affects party preferences. Compared with standard employees, atypical workers have stronger preferences for small left-wing parties. Living together with a labour market insider neutralizes these party preferences, but this type of household is not very common. Moreover, atypical workers differ from the unemployed by not participating less in elections than insiders. Therefore, it is expedient to distinguish between different types of labour market outsiders.

Understanding the New Politics of Welfare Reform: Preface

For some time, a sense of crisis has surrounded welfare states. Deregulatory pressures, sluggish economic growth, deindustrialisation of labour markets, rising unemployment, demographic ageing, declining birth rates and family restructuring are commonly listed among the most pressing challenges facing mature welfare regimes.Together, such challenges contribute to an explosive mix by simultaneously exerting pressure for increases in social welfare expenditure while contracting the fiscal foundation on which states rely to deliver it. While such pressures are not new, they have been severely aggravated by the financial crash of 2008 and the global recession now under way.As governments struggle to finance their large and increasing budget deficits, they advance plans for welfare cutbacks while bracing themselves for backlash over austerity measures. Conflicts over coming changes in social policy, and especially over the new distributional inequalities they are likely to generate, look set to intensify in coming years. This dim prospect provides a timely background for this collection of articles. If there was ever a time when it was critical to dig deeper into the operating conditions, mechanisms and strategies of austerity management and welfare restructuring in this era of unwavering austerity, that time is now. In mature welfare states the lion’s share of social expenditure goes to health care and pensions. Compared with these, the more recently adopted active labour market policies (ALMP), designed to promote skill training, mobility and employment, represent a much thinner slice of the budget.YetALMPs are perceived as key in an environment characterised by the accelerating dualisation of the workforce. Labour market insiders, those holding standard, protected and stable jobs, face a growing number of labour market outsiders, marginally or insecurely employed, and more likely to find themselves in unemployment. Under conditions of tightening financial austerity, such conflicts in what is an already divided labour market are likely to deepen further,and welfare politics can easily turn into a tense zero-sum game,where the gains of one group are obtained at the cost of the losses of the other. While the importance of the insider/outsider divide has been recognised, our understanding of how it gets to be represented in party and interest intermediation systems remains limited.The first article in this special section addresses this gap in our knowledge. Classical power resource theory argued that the role and the power of the left ‐ trade unions bs_bs_banner

Product Market Regulation and Labor Market Performance around the World

AbstractUsing annual data on 80 countries for 1980–2007 and a new indicator of product market regulation, this paper studies the effects of product market regulation on labor market performance among the total population as well as among two important groups of labor market outsiders: women and youth. It finds that stricter regulation is likely to both increase the unemployment rate and decrease the employment rate. The magnitude of the estimated effects is substantial. There are above‐average effects on both groups of outsiders, with the effects being particularly strong on youth. The results are robust to variations in specification.

Flexicurity in the European Union: Flexibility for Outsiders, Security for Insiders

Flexicurity is at the heart of European policy debates. Its aim is to overcome the tensions between labour market flexibility on the one hand, and the provision of social security for workers on the other hand. To date, there is little insight into whether flexicurity policies have been adopted across the European Union. Therefore, the aim of this paper is to analyse to what extent labour market policies have been reformed along the lines of the flexicurity concept across 18 European countries over the period 1985-2008. Focusing on the main axes of the flexicurity concept, new datasets are used to examine changes in employment protection legislation, unemployment benefits and active labour market policies. Data on the strictness of employment regulation indicate that reforms have been influenced by labour market insiders, since the level of flexibility has been increased more for temporary employment, the labour market outsiders, than for regular employment, the insiders. Although gross unemployment replacement rates suggest that unemployment benefits have become more generous, net replacement rates indicate that the level of income security from benefits actually has been decreased. Moreover, data illustrate that larger shares of European labour forces have temporary contracts. As such, the gap between insiders and outsiders on the labour market has been increased. This development is contrary to the goals of the European Commission.

Barriers to entry: insider/outsider politics and the political determinants of job security regulations

Job security regulations, here understood as restrictions on hiring and firing, figure prominently in the policy recommendations of international organizations or national reform programmes. However, in contrast to the prominence of job security regulations in the current reform discourse, hardly any attention is paid to their determinants. In this article, the insider/outsider theory of employment and unemployment is examined. Advocates of this approach argue that job security regulations mainly benefit the labour market insiders. As a consequence, insiders will fight all reforms that aim to dismantle these regulations. The insiders are supported by Social Democratic parties, which only represent the interests of the insiders. In this article it is maintained that this simple argument is wrong. Labour market outsiders can be expected to be equally supportive of job security regulations and Social Democratic parties as labour market insiders. This claim is supported by the empirical analysis using survey data.

Creating Outsiders: Silent Non-Exit, Broken Voice, and Political Anomie Through Post-Communist Social Policy

This theoretical essay contributes towards the development of a positive political analysis of post-communist social and labor market policies, and applies this by reinterpreting existing empirical studies on Hungary and Poland. I argue that post-1989, governments in both democracies have used social policies to proactively create new labor market outsiders, rather than passively deal with existing outsiders, in an effort to stifle both disruptive and electoral repertoires of political voice. Micro-collective action theory helps to elucidate how the break-up of hitherto relatively homogeneous clusters of threatened workers into newly competing interest groups has shaped the nature of distributive conflict in these nascent democracies. This indicates how positive political theories of post-communist social policy can advance and modify current, predominantly Western-oriented, theories of insider/outsider conflict and new politics of welfare retrenchment, and can inform future debates about emerging models of democracy and social policy age biases in Eastern Europe.

Wage Bargaining in the Presence of Social Services and Transfers

OECD economies were able to reconcile the pursuit of welfare state expansion and full employment during the first decades of the postwar period. Yet the trade-off between these two policy objectives widened in recent decades. To explore the question ofwhy this change occurred, this article extends familiar models of wage determination by adding a number of parameters that capture cross-national differences among welfare states. The model identifies the conditions under which unions deliver wage moderation in exchange for social policy benefits and transfers and explores how different labor-market institutions magnify or decrease the impact of wage choices on the equilibrium level of employment. Next, the author examines the impact of changes in the composition of social policy expenditures and in the level of the tax burden on. unions' wage choices. She shows that mature welfare states, characterized by high tax burdens and a high share of transfers devoted to labor-market outsiders, reduce the effectiveness ofwage moderation in lowering unemployment. The author tests the main propositions using OECD panel data for the period 1960–95.