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Preferences for Employment Protection and the Insider-Outsider Divide

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  • Guillaud, Elvire

    () (University of Paris 1 Panthéon-Sorbonne)

  • Marx, Paul

    () (University of Duisburg-Essen)

Abstract

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.

Suggested Citation

  • Guillaud, Elvire & Marx, Paul, 2013. "Preferences for Employment Protection and the Insider-Outsider Divide," IZA Discussion Papers 7569, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7569
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    References listed on IDEAS

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    More about this item

    Keywords

    political preferences; insider-outsider theory; employment protection; single employment contract; France;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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