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This paper addresses the evolution of social policy for labor-market outsiders—individuals without contributory social benefits—in Latin America since the beginning of the third wave of democracy in the late 1970s. Building on existing research on social policy expansion, it systematically assesses the effect of levels of democracy, protest, partisanship, and electoral competition on social policy adoption, the reach of social programs, and on different forms of welfare inequality across the region. In dialogue with the literature on the welfare state, and considering the economic constraints affecting Latin America in the 2010s, the paper explores whether the factors that account for social policy adoption also explain continuity and change in social policy over time. The paper relies on original quantitative data of social policy and welfare inequality as well as on qualitative data obtained through extensive field research.