Download Dualisation Workshop - Oxford - January 2010-6

Dualisation Project Workshop
14-16 January 2010 at Green Templeton College, Oxford
Thursday 14th January 2010
Revised Background Paper/Book Proposal
Patrick Emmenegger, Silja Häusermann, Bruno Palier, Martin Seeleib-Kaiser
Discussant: Peter Kemp
Inequality in most advanced industrial societies has increased during the past decades (OECD
2008). We hypothesise that the increased inequality is to a large extent the result of an increase in
dualism. The concept of dualism relates to bifurcations in different realms of society, with
‘insiders’ having access to employment based on standard employment relationships, being
sufficiently covered by social protection schemes and represented in the political realm, and
‘outsiders’ having to cope with unemployment or atypical employment, low levels of pay and/or
social protection as well as limited political representation. In addition to analysing the extent of
dualism, a main contribution of this project is to scrutinise the processes and mechanisms leading
to dualism. These processes and mechanisms are conceptualised as dualisation. Processes of
dualisation may occur in various domains, such as labour markets, social policy and political
participation. An international comparative perspective promises insights into why some
countries witness lower levels of dualism, whereas for others, it has become a core characteristic.
The aim of this background paper is to situate the project in various literatures (section 1); define
the main puzzle and objectives (section 2); explain the dimensions and levels of 2 analysis
(section 3); develop core research questions and hypotheses (section 4) and to provide
clarifications with regard to the conceptualization and operationalisation of key terms (section 5).
Varieties of Dualization? Identifying Insiders and Outsiders Across Regimes
Silja Häusermann and Hanna Schwander
Discussant: Jacqueline O‘Reilly
All post-industrial labor markets become increasingly segmented between insiders who are in
standard employment, and outsiders who incur a greater risk of unemployment and/or atypical
employment. In this paper, we analyze to what extent this segmentation translates into actual
economic, social and political dualism. We argue that this translation depends on institutional
welfare regimes. While some regimes countervail segmentation – thereby preventing actual
dualism in outcomes -, others perpetuate or even reinforce insider-outsider divides. Empirically,
we show that structural change towards post-industrial labor markets has produced similar, but
not identical sets of insiders and outsiders across regimes. We then examine the distributional
consequences of segmentation with regard to three sets of outcomes: a) labor market dualism, i.e.
gross earnings power as well as access to job mobility and training; b) social protection dualism,
i.e. the effect of taxes and transfers on net income differentials between insiders and outsiders,
pension policy and labor market policy coverage; and c) political integration dualism, i.e. the
insider outsider gap in terms of trade union membership and political participation. The chapter
demonstrates that the structural trend of labor market segmentation results in different patterns of
dualization: continental and southern European regimes perpetuate and even reinforce the insider
outsider divide with regard to all three dimensions of dualism. In liberal welfare regimes,
outsiders face strong disadvantages in the labor market. However, the liberal welfare state
contributes to narrowing the gap between insiders and outsiders in terms of net income. In the
Nordic welfare regimes, labor market segmentation is also a reality. However, insiders and
outsiders fare more equally with regard to job perspectives, income, welfare rights and political
integration.
The Impact of Labour Market Segmentation on Social Dualisation in Germany and
the UK: A Latent Variable Approach
Mark Tomlinson and Robert Walker
Discussant: Patrick Emmenegger
People occupy different segments of the labour market. Those in the core often have permanent
contracts with training and personal development opportunities with their employers, while those
in the periphery often have temporary or unstable contracts and less opportunity for
advancement. These peripheral workers are often excluded from social arrangements taken for
granted by other employees and are not only marginalised within the labour market, but in other
areas as well. This paper analyses longitudinal individual data from the UK (the British
Household panel Study) from 1991 to 2005 and explores the relationship between segmentation
in the labour market and its longer term implications for recurrent poverty experience. Statistical
modelling is employed to show how being an outsider in the job market affects poverty in future
years.
The Insider-Outsider Dilemma: Party Politics, Labor Markets, and Political
Behavior in Sweden
Johannes Lindvall and David Rueda
Discussant : Bernhard Ebbinghaus
This paper argues that labor market “outsiders” whose interests are ignored by mainstream leftwing parties become more likely to exit politics or support radical parties. We also argue that left
parties face a dilemma: if they propose policies that benefit insiders, they push outsiders to exit
politics or to support radical parties; if they propose policies that benefit outsiders, on the other
hand, they see their support decline among insiders. We test our claims with data from Sweden,
which we argue is a critical case. We analyze electoral data from 1994 to 2006, focusing on the
interaction of party politics and individual preferences. Specifically, we explore the relationship
between (1) the changing electoral strategies of Swedish political parties – particularly the Social
Democrats – and (2) the preferences and party choices of insiders and outsiders in the Swedish
labor market.
Friday 15th January 2010
Labour Market Dualization in Japan and South Korea
Ito Peng
Discussant: Martin Seeleib-Kaiser
This paper discusses interactions of industrial relations, labour market and welfare regimes in the
two East Asian political economies of Japan and Korea. It argues that both countries have been
going through a re-articulation of their political economies since the 1990s in response to the
changing global economic context. Although it is still early to know exactly where this will lead,
the direction of changes thus far suggests a move towards increased dualization. Second, the
dualization processes observed in Japan and Korea is not only intensifying the existing labour
market dualism, along the lines of gender and establishment size, but also adding to it a new
demographic dimension, with overall effects of increased income inequality and disrupted
individual life course patterns. Third, the disruptions to the traditional institutional arrangements
in these countries have also spurred the state to take more active role in social welfare: in the case
of Japan through gradual policy changes in response to the socio-economic disruptions and
rapidly ageing population; while in the case of Korea, a more radical resetting of economic and
social policies in response to the changing contexts. In either case, politics and political processes
have made significant differences in determining state responses to socio-economic changes. And
in both cases, employment insurance schemes have been expanded, and reformed, to support and
to re-skill those falling out of the labour market, and new social provisions – particularly longterm care insurance and child care – have been introduced to meet the care needs of the old and
young, and to incentivize fertility increase and women’s employment. The rest of the paper
examines the processes of economic dualization in Japan and Korea by tracing the political
economic dimensions of the three subsystems, industrial relations, labour market, and the welfare
state, and how they interact with each other. The last section will attempt to synthesize the
learning from the two East Asian cases.
Coping with Dualisation? Labour Market Policy Reforms in Small Open
Economies since the 1990s
Alexandra Kaasch, Julia Moser, Herbert Obinger and Peter Starke
Discussant: Des King
The paper is less about labour market dualization as a social or economic phenomenon but rather
about dualism as a political problem. Since there is little systematic research that seeks to explain
dualization by political factors, this paper is concerned with the interrelationship of labour market
and social policy developments, and their underlying politics. The trend towards dualization and
rising inequality is not comparatively analysed but rather taken as a given on the basis of
comprehensive evidence (cf. OECD 2008; ILO 2008). Instead, it is interested in the ways in
which dualization enters the political agenda and, in particular, the various social policy
responses that can be linked to the phenomenon. Has dualism, i.e. a divide between labour
market insiders and outsiders, received more attention in recent years across OECD-countries?
And, if so, have different welfare states responded in different ways to that problem and why? In
this chapter insiders are defined as ‘those workers with highly protected jobs. Outsiders, by
contrast, are either unemployed or hold jobs characterized by low levels of protection and
employment rights, lower salaries and precarious levels of benefits and social security
regulations’. The paper looks at responses to dualism in Austria, New Zealand, Sweden, and
Switzerland since 1990. The four countries showed significant differences in terms of their
welfare state patterns, political systems and labour market policies at the end of the Golden Age
and all of them have witnessed increasing labour market dualization, e.g. rising shares of parttime (mostly women) and temporary workers. The paper starts its analysis in the early 1990s
when economic structural changes confronted governments with challenges of labour market
dualism.
Dualization and the Service Economy: Employment Patterns in Bismarckian
Welfare States
Werner Eichhorst and Paul Marx
Discussant: Olli Kangas
During the post-war period, Bismarckian welfare states developed an institutional arrangement
around full-time regular employment in manufacturing. The sectoral shift from industry to
services has major implication for the structure of jobs and the institutional setting as some parts
of the private service sector to not fit into the established pattern of employment and social
protections and collective bargaining due to lower productivity. Hence, to stimulate job growth in
private services and to increase employment opportunities for low-skilled people Bismarckian
countries had to allow for the development of labour market segments deviating from standard
working conditions. Based both on deliberate policy reforms and micro-level action by employers
and employees, different options of non-standard employment such as fixed-term jobs, temporary
agency work, selfemployment and low-pay jobs grew in importance. The chapter shows the
divergence of non-standard work in five countries and relates this to the institutional
opportunities available to employers and employees. The specific role these options play varies
across the Bismarckian countries as does the political economy behind the de- and re-regulation
of atypical work.
The Politics of Dualisation in Unemployment Protection Policy: A Franco-Belgian
Comparison
Daniel Clegg
Discussant: Anke Hassel
The aim of this paper is to explore the apparently contrasting institutional and distributive choices
made in France and Belgium concerning Unemployment insurances.It emphasises in particular
the role of the differing incentive structures that confronted organised labour in the two cases, as
a result of variations in the nature of social governance institutions in the unemployment
protection sector. While it has long been recognised that the administrative functioning of labour
market institutions can have feedback effects on extent and profile of trade union membership,
the argument in this paper is that it can also shape the organisational interests of trade unions in
ways that are consequential for patterns of social policy choice, even (and perhaps particularly) in
a context of ‘permanent austerity’. Given the role of diverse social protection institutions in
shaping actor interests and strategies, the paper suggests, tendencies to polarisation in the labour
market can produce very different social policy responses, even within similar welfare production
regimes.
United We Stand, Divided We Fall: the Impact of Labour Market Dualization on
Tax Progressivity
Achim Kemmerling
Discussnant : Pablo Beramendi
This paper uses the economic notion of insidership in labour markets to explain the (relative)
decline of the (low-wage) tax progressivity. It show the merits and also some limits of such an
approach. There is some reason to believe that dualisation, defined as a conflict of insiders and
outsiders, is one of the determinants of the recent decline in tax progressivity. The theoretic
rationale is that in a labour market with institutionalized insiders, a low tax burden for low-skilled
workers constitutes a threat for established jobs and the bargaining power of unions. The paper
uses two sorts of empirical evidence to prove this hypothesis: (1) pooled data for OECD countries
shows that the macro-aggregate variation is in line with the hypothesis; (2) a comparative case
study of the UK and Germany shows that it explains recent differences in the evolution of tax
progressivity.
From Dilemma to Dualisation: Social and Migration Policies in the ‘Reluctant
Countries of Immigration’
Patrick Emmenegger and Romana Careja
Discussant: Bruno Palier
Western European governments face a dilemma. On the one hand, the immigrant population in
their countries keeps growing due to the refugees they are obliged to admit, the constitutional
right to family and the economy’s need for labour market flexibility and skills. On the other hand,
the public opposes large-scale immigration and wants to restrict immigrants’ access to social
benefits. We argue that France, Germany and Great Britain, often described as ‘reluctant
countries of immigration’, solve this tension by dualising their societies. Firstly, they actively
encourage the immigration of ‘desired’ workers, while erecting barriers to entry for ‘undesired’
immigrants. Secondly, they adapt their social security systems in order to diminish the transfer of
resources from citizens to immigrants. These welfare reforms do not lead to a ‘race to the
bottom’, as famously foreshadowed by Alesina and Glaeser (2004). Rather, the supported
reforms are selective. Nevertheless, these developments have also important consequences for
national citizens. For legal reasons, many measures that target the social rights of migrants lead to
reforms of programmes that also provide benefits for citizens. Thus, although fuelled by welfare
state nationalism, these reforms contribute to a bifurcation of Western societies with many
citizens and few high-skilled migrants reaping the benefits of the European social model and
some citizens and many migrants carrying the burden of economic adjustment.
Saturday 16th January 2010
Shifting the Public-Private Mix: A New Dualization of Welfare?
Martin Seeleib-Kaiser, Adam Saunders and Marek Naczyk
Discussant: Kathleen Thelen
Welfare dualism has always been part of social protection arrangements in Liberal and
Conservative welfare states. However, during the ‗golden era‘ of welfare state capitalism, the
Liberal and Conservative welfare states demonstrated two different kinds of welfare dualism.
Liberal welfare states provided means-tested public policies for the poor and relied heavily on
occupational welfare for the middle class, whereas Conservative welfare states provided social
insurance for workers and means-tested policies for the non-working poor. We hypothesise that
in Liberal welfare states occupational welfare provision is declining and an increasing percentage
of the population is becoming reliant on state welfare. In contrast in Conservative welfare states,
an increasing proportion of people, previously covered by social insurance, have to rely on
means-tested welfare benefits. In parallel certain sectors are expanding the provision of
occupational welfare. We argue that these developments can largely be explained by deindustrialization, changed preferences among employers and prevailing governance structures
Institutionalizing Dualism: Complementarities and Change in France and Germany
Bruno Palier and Kathleen Thelen
Discussant: David Rueda
The French and German political economies have been significantly reconfigured over the past
two decades. Although the changes have often been more piecemeal than revolutionary, their
cumulative effects are profound. We characterize the changes that have taken place as involving
the institutionalization of new forms of dualism, and argue that what gives contemporary
developments a different character from the past is that dualism is now explicitly underwritten by
state policy. We see this outcome as the culmination of a sequence of developments, beginning in
the field of industrial relations, moving into labor market dynamics, and finally finding
institutional expression in welfare state reforms. Contrary to theoretical accounts that suggest that
institutional complementarities support stability and institutional reproduction, we argue that the
linkages across these realms have helped to translate employer strategies that originated in the
realm of industrial relations into a stable new and less egalitarian model with state support.
Discussion of deadlines for final manuscripts etc.