Squared Segmentation: How the Insider/Outsider divide across Public/Private Employment shapes attitudes towards markets

This paper addresses an important gap in the literature by exploring the interaction of twin insider-outsider and public private/employment dualities on shaping attitudes towards markets. We show how, in countries highly segmented in both dimensions, the insider-outsider cleavage and the public-private employment division combines into a squared segmentation with public and private insiders, and public and private outsiders. Our assumption is that this squared segmentation is accompanied by negative attitudes towards market mechanisms that hinder reforms required to diminish the gap between insiders and outsiders. To flesh out this dynamic, we use France as our main case study, because it is an economy where these dualities are sharply drawn. We explore our assumption based on the Wave 5 of the World Values Survey, limiting our analysis to French and German respondents. Germany offers a suitable comparison group to France, as it has also a highly dual economy but structured through production sectors rather than through the public/private divide. The results are broadly in line with our assumptions. Unlike in Germany, French respondents’ attitudes towards markets depend heavily on whether they are employed in the public or private sector