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Preferences for Employment Protection and the Insider-Outsider Divide

  • Guillaud, Elvire

    ()

    (University of Paris 1 Panthéon-Sorbonne)

  • Marx, Paul

    ()

    (University of Southern Denmark)

Insider-outsider theory suggests that in dual labour markets two groups have opposing preferences regarding protection against dismissals: insiders defend employment protection, because it increases their rents. Outsiders see it as a mobility barrier and demand deregulation. Similar divides are expected for unemployment benefits: as insiders and outsiders have diverging unemployment risks, they should demand different levels of protection. Although these views are influential in the political economy debate, there is little empirical research on the effect of contract types on social and labour market policy preferences. We use a novel data set collected in the most recent presidential contest in France, which combines detailed information on respondents' employment status with questions measuring attitudes towards dismissal regulation and other labour market policies. Going beyond insider-outsider theory, we argue and show empirically that the effect of membership in either segment is moderated by the employment situation in workers' occupation.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7569.

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Length: 23 pages
Date of creation: Aug 2013
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Handle: RePEc:iza:izadps:dp7569
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  1. Thomas Cusack & Torben Iversen & Philipp Rehm, 2006. "Risks at Work: The Demand and Supply Sides of Government Redistribution," Oxford Review of Economic Policy, Oxford University Press, vol. 22(3), pages 365-389, Autumn.
  2. Elvire Guillaud, 2011. "Preferences for redistribution : an empirical analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00594072, HAL.
  3. Nicolas Lepage-Saucier & Juliette Schleich & Etienne Wasmer, 2013. "Moving Towards a Single Labour Contract: Pros, Cons and Mixed Feelings," OECD Economics Department Working Papers 1026, OECD Publishing.
  4. Bruno Amable, 2014. "Who wants the contrat de travail unique? Social support for labour market flexibilisation in France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01011694, HAL.
  5. Bentolila, Samuel & Dolado, Juan J. & Jimeno, Juan F., 2011. "Reforming an Insider-Outsider Labor Market: The Spanish Experience," IZA Discussion Papers 6186, Institute for the Study of Labor (IZA).
  6. Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002. "Drawing Lessons From The Boom Of Temporary Jobs In Spain," Economic Journal, Royal Economic Society, vol. 112(721), pages F270-F295, June.
  7. Elvire Guillaud & Nicolas Sauger, 2013. "Redistribution, Tax Policy and the Vote: The 2012 French Presidential Election," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00796047, HAL.
  8. Lindbeck, Assar & Snower, Dennis J, 1988. "Cooperation, Harassment, and Involuntary Unemployment: An Insider-Outsider Approach," American Economic Review, American Economic Association, vol. 78(1), pages 167-88, March.
  9. Tito Boeri & Axel Börsch-Supan & Guido Tabellini, 2001. "Would you like to shrink the welfare state? A survey of European citizens," Economic Policy, CEPR;CES;MSH, vol. 16(32), pages 7-50, 04.
  10. Assar Lindbeck & Dennis J. Snower, 2001. "Insiders versus Outsiders," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 165-188, Winter.
  11. Elvire Guillaud, 2013. "Preferences for redistribution: an empirical analysis over 33 countries," Journal of Economic Inequality, Springer, vol. 11(1), pages 57-78, March.
  12. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 381-402.
  13. Saint-Paul, Gilles, 2000. "The Political Economy of Labour Market Institutions," OUP Catalogue, Oxford University Press, number 9780198293323, December.
  14. DiPrete, Thomas A. & Goux, Dominique & Maurin, Eric & Quesnel-Vallée, Amélie, 2003. "Work and pay in flexible and regulated labor markets: A generalized perspective on institutional evolution and inequality trends in Europe and the US," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2003-109, Social Science Research Center Berlin (WZB).
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