Insiders, Outsiders, Skills, and Preferences for Social Protection: Evidence From a Survey Experiment in Argentina

• DOI: 10.1177/00104140211024304
• Date: 01 December 2021
• Author: Irene Menéndez González
• Published date: 01 December 2021
• Subject Matter: Articles

Article

Comparative Political Studies

2021, Vol. 54(14) 2581–2610

© The Author(s) 2021

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DOI: 10.1177/00104140211024304

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Insiders, Outsiders,

Skills, and Preferences

for Social Protection:

Evidence From a Survey

Experiment in Argentina

Irene Men´

endez Gonz´

alez

1



Abstract

Standard theories in comparative political economy predict that labor market

insiders oppose redistribution to poorer, often informal, labor market

outsiders. In contrast, I argue that not all insiders oppose redistribution to

outsiders. Extending recent work emphasizing the importance of economic

insecurity for insiders, I argue that exposure to risk leads to greater polar-

ization regarding preferences for non-contributory social policy between low-

and high-skilled insiders. I test implications of this logic using a survey

experiment from a nationally representative sample in Argentina and com-

plement this with analysis of observational data for 16 Latin American

countries. I find strong evidence of polarization regarding preferences over

social protection among low- and high-skilled insiders. The experiment re-

veals that low (high)-skilled insiders primed about the risk of becoming

outsiders become more supportive of transfers to outsiders (insiders). The

article provides new micro-foundations for insider–outsider coalitions in

support of social policy expansion in middle-income countries.

Keywords

political economy, social welfare programs

1

IE University, Madrid, Spain

Corresponding Author:

Irene Men´

endez Gonz´

alez, Department of Political Science, University, IE University, Madrid

28006, Spain.

Email: Irene.Menendez@ie.edu

To what extent do privileged workers in unequal contexts support social

programs that benefit the working poor, and why? Welfare states in most

developing countries have traditionally been limited to those with relatively

stable, well-paid formal sector jobs (insiders), at the expense of the bulk of the

working poor, typically informal (outsiders). Yet recent years have seen the

expansion of progressive, non-contributory policies—typically financed by

general revenues or pay-roll contributions—that provide social protection to

outsiders across the developing world.

1

A growing literature in political

economy seeks to understand variation in policy patterns, emphasizing the

role of electoral competition (D´

ıaz-Cayeros et al., 2016;Garay, 2016),

ideologically committed governments (Huber & Stephens, 2012;Levitsky &

Roberts, 2011), and organized interests in increasingly unequal contexts

(Fairfield & Garay, 2017). However, less attention has been devoted to un-

derstanding the micro-foundations underpinning social policy expansion.

In many political economy accounts, the distinction between insiders and

outsiders is an important cleavage. Well-known arguments developed in the

European context predict differences in support over labor market policies or

redistribution between insiders and outsiders (Rueda, 2007). The insider–

outsider divide also underpins prominent studies of social policy expansion

in Latin America, based on the premise that insiders oppose non-contributory

social policies, from which they benefit little and pay for (Haggard &

Kaufman, 2008;Huber & Stephens, 2012). Other scholars link social policy

expansion to labor market changes and argue that deindustrialization in-

creased the size of vulnerable employment, increasing economic insecurity

among formal workers and bringing their interests closer to those of out-

siders (Carnes & Mares, 2014,2016).

These frameworks have provided powerful insights, but important theo-

retical and empirical questions remain. Conceptually, most accounts do not

distinguish among insiders. This implies that coalitions for social policy

expansion are based exclusively on outsider support. In turn, arguments based

on social insurance theories predict that insider workers across the board

support social policy expansion when faced with greater risk of job loss. Yet

while all insiders enjoy some level of employment protection, they are not

equally protected from (or exposed to) labor market risk. Recent evidence

shows that deindustrialization, skill-biased technological change, and the

move from import-substitution industrialization to open economies have

increased the income and employment gap between workers with different

levels of skill in many middle-income economies (Goldberg & Pavcnik,

2007).

The evidence with respect to preferences for redistribution among insiders

and outsiders is limited and rather mixed. While some studies offer support for

preference convergence between insiders and outsiders (Baker & Velasco-

Guachalla, 2018;Berens, 2015;Carnes & Mares, 2014), others find some

2582 Comparative Political Studies 54(14)