Politics Against Dualization? Welfare and Labor Markets in Latin America

• In Event: Overcoming Uneven Welfare States: The Politics of Welfare Reform in Latin America

Abstract

The comparative political economy literature in advanced countries argues that labor-based parties often advance the interests of “insiders” (unions and formal workers) at the expense of outsiders (i.e. precarious, informal, or unemployed workers). While insiders are organized actors with political clout, outsiders are atomized and politically marginal. In Latin America, a recent wave of welfare state studies has analyzed the inclusion of informal workers through a variety of policies and programs since the 2000s. This paper aims to unravel the dynamics of economic dualization in the labor market—i.e. the differences in the policies between insiders and outsiders—in post-neoliberal Latin America. We test the level of benefits and income in countries with both popular parties in coalition with union insiders, and those in which unions are excluded. We hypothesize that, in contrast to some standard political economy analyses, countries in which governing parties have strong union alliances policies decreased labor market fragmentation. We argue that popular parties based on political coalitions that bridge the insider-outsider divide have been more successful to counter economic dualization.

Authors

• Sebastian Etchemendy, Department of Political Science

• Sara Niedzwiecki, University of California, Santa Cruz