Insider-outsider divides and support for social investment policies

Abstract: In recent years, many scholars have observed increasing polarization in the distribution of labor market risk, as well as social and employment rights. This phenomenon is often referred to as labor market dualization, a process deepening the divide between privileged insiders and less fortunate outsiders. Some authors have begun to search for a possible insider-outsider divide in policy preferences and voting behavior, fueled by their irreconcilable interests. In parallel, the literature on welfare state development has observed (and even vocally advocated for) a reframing of welfare policies as social investment policies, geared towards the creation, maintenance, and activation of human capital throughout the life course. A welfare reform strategy founded on the expansion of so-called social investment policies, such as childcare services, active labor market policies, and education, has been invoked as a way to reconcile the interests of the working and middle classes, and to reduce dualization. In this thesis, I estimate logistic regression models on public opinion data from eight West European countries to study support for social investment policies. Specifically, I ask whether insiders and outsiders differ in the importance they attribute to social investment policies vis-à-vis traditional social protection, or in how they view the primary purpose of the welfare state. I find no evidence of an insider-outsider divide on the level of spending priorities. When asked to choose only one policy area where they would like to see a spending increase, outsiders are not more likely than insiders to prioritize social investment policies. I do find evidence against outsider support for social investment on an ideational level, since outsiders are less likely than insiders to view social investment as the primary purpose of the welfare state.