Preferences for Employment Protection and the Insider-Outsider Divide

23 Pages Posted: 31 Aug 2013

See all articles by Elvire Guillaud

Elvire Guillaud

Université Paris I Panthéon-Sorbonne

Paul Marx

IZA Institute of Labor Economics

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.

Keywords: employment protection, insider-outsider theory, political preferences, France, single employment contract

JEL Classification: J08, J41, K31

Suggested Citation

Guillaud, Elvire and Marx, Paul, Preferences for Employment Protection and the Insider-Outsider Divide. IZA Discussion Paper No. 7569. Available at SSRN: https://ssrn.com/abstract=2318750

Elvire Guillaud (Contact Author)

Université Paris I Panthéon-Sorbonne ( email )

106-112 boulevard de l'Hopital
Paris, 75013
France
+33 144 078 151 (Phone)

HOME PAGE: http://https://sites.google.com/site/elvireguillaud/

Paul Marx

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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