Changes in Labour Market Policies, the Gender Model and Social Inequality: Institutional Dualization Revisited

Irene Dingeldey

Since the 1990s, the new welfare state paradigm of the social investment or activating welfare state has inspired policy reforms in many Organization for Economic and Cooperative Development (OECD) countries (Hemerijck 2012; Morel et al. 2012). The flexibilization of labour markets and wages has formed part of these countries’ reform trajectories. A particular goal of activating labour market policy fostered by both European Union (EU) policies and OECD policy recommendations has been to increase females’ and, in particular, mothers’ employability (Dingeldey 2011). Although once considered ‘frozen landscapes’ (cf. Esping-Andersen 1999) because of their previous resistance to fundamental change, conservative welfare states have since joined these reform initiatives. Based on analyses of labour market policies, employment regulation and collective bargaining, a particular strand within comparative [1]

welfare state research has identified institutional dualization[2] as a central feature of policy reform. Institutional dualization emerges because existing institutions are defended by inter-class coalitions of organized labour and management (Palier and Thelen 2010). Hence:

‘The status and privileges of labour market insiders remain relatively well protected, with the flexibility necessary to stabilize the core being achieved at the expense of a growing number of workers in ‘atypical’ or ‘nonstandard’ employment relationships.’ (Palier and Thelen 2010, 139) Change therefore occurs by either ‘layering’ or ‘drift’. While the first mechanism means that newly created institutions have gained importance and paralleled the old ones, the second suggests that institutions have lost their importance due to their resistance to structural change (Streeck and Thelen 2005). So far, however, institutionalist analyses reflect neither changes in the gender model nor the impact of such changes on newly emerging patterns of inequality. Although Palier and Thelen (2010) lean strongly on the varieties of capitalism approach (VoC) (Hall and Soskice 2001), they reject the assumption that institutional complementarities support stability, identifying instead an ‘unravelling of institutions’ as change in one area destabilizes relations in another. (Palier and Thelen 2010, 121) Their observation, however, supports the assumption that changes in labour market policy go along with changes in family policy and the established gendered distribution of work.

Drawing on Palier and Thelen’s (2010) research, Emmenegger et al. (2012) as well as Kroos and Gottschall (2012) noted the emergence of a labour market divide as well as an overrepresentation of women among outsiders. This characterization, however, may be too simple to adequately characterize the complexity of emerging patterns of social inequality. As early as the 1970s, the thesis of a dualization of the labour market, referring to the divide between internal and external labour markets in American enterprises (Doeringer and Piore 1971), was rejected and substituted by the segmentation approach. With reference to Germany, this approach emphasized the existence of multiple labour market divides according to qualification and profession (Sengenberger 1978). Additionally, femi-

I am very grateful to Jan Giese and Sonja Kittelsen for their help editing the text.

Conceptually, institutional dualization differentiates between process (dualization), output (institutional dualism) and outcome (divide) (Emmenegger et al. 2012).

nist researchers drew attention to gender segregation in professions and branches, as well as to the hierarchical structures that gender segregation creates (Rubery et al. 1998). Against that background, the newly introduced term ‘dualism’, understood simply as the distinction between standard and flexible forms of employment, was already being criticized as ‘tautological’ (Knuth 2011, 584).

The discussion on ‘gendering’ the VoC approach (Hall and Soskice 2001) emphasized that in coordinated market economies, collective bargaining and training generate sufficient income for full-time working men. Thus, women’s labour market participation only increases when the state generates public sector employment and provides universal childcare. This approach was practiced mainly in the Scandinavian countries (Estevez-Abe 2005; Soskice 2005). In conservative welfare states like Germany, the lack of affordable childcare hindered full-time female employment or encouraged non-participation even among highly qualified mothers. However, the contention that ‘women always lose out’ (Rubery 2009, 199) has yet to be proven. Since the 1980s, employment growth has generally been due to an expansion of the service sector. Hence, increasing rates of female labour participation have been accompanied by a rise in different forms of part-time employment (Hassel 2014). This development has been reinforced by labour market activation policies since the beginning of the new millennium (Dingeldey 2011). At the same time, collective bargaining institutions have largely eroded in the private service sector. As a consequence, throughout Germany wage dispersion has grown (Dustmann et al. 2009; Eichhorst 2015).

Hence, a more encompassing study of institutional dualization and institutional complementarities is needed in order to show how increasing commodification and market flexibility are adapted to the needs of social reproduction and family relations (Streeck 2009). Simply put, a gender-sensitive focus on institutional reforms in collective bargaining and labour market regulation, as well as on their specific outcomes, is necessary. Family policy and the supported gender model should be included in the analysis because they form institutions relevant to the coordination of production and reproduction. If we then follow the argument that the family both presupposes and compensates for inequalities with respect to gendered labour market patterns and wage differentials

  • (LehweE-Lietzmann 2012), the analysis must go beyond the labour market status of individuals. Social inequalities must be considered at the household level. Concrete questions to be answered within that framework are as follows:
    • 1. Does institutional dualization also apply to family policy, and do outcomes of dualization indicate gendered effects?
    • 2. Do institutional complementarities across the different policy fields support a particular gender model?
    • 3. How does the social divide between labour market insiders and outsiders develop when household level is considered?

The following reassessment of institutional dualization as a particular pattern of change is based on an in-depth study of Germany, which is typol- ogized both as a coordinated market economy and as a conservative welfare state (Schroder 2009) with a strong male breadwinner model (Lewis 2001). The focus has been on institutional changes since the turn of the millennium. The impact of these reforms is analyzed using the most recent data on employment forms, wages and family employment patterns. Although the empirical evidence may reaffirm individual facts that are already well known, recent changes in institutional complementarities between collective bargaining and wage setting, and between labour market regulation and family policy, to date have not been outlined. Furthermore, the perspective on households indicates that the worsening of working conditions borne by different labour market segments is ‘compensated’ for by the consolidation of a one-and-a-half earner or modernized (male) breadwinner family model. Although this development is well known, its relevance with respect to the particular segmentation of the German labour market and its function for social inequality is hardly discussed. Hence, particular combinations of employment and family forms create a social divide.

After discussing theoretical concepts used to operationalize the research questions, I briefly outline the starting point of historical institutional complementarities in the German model and its development until the end of the 1990s. On this basis, I analyze the institutional dualization of family policy. Gendered outcomes of that process are traced in the fields of labour market regulation and collective bargaining. I then discuss institutional complementarities across different policy fields and examine social inequality in light of emerging employment and income patterns at the household level. In the conclusion, I highlight the main findings from the German case and compare them to results from other OECD countries. Finally, I identify questions for further research.

  • [1] Dingeldey (*) Institute of Work and Labour, University of Bremen, Bremen, Germanye-mail: This email address is being protected from spam bots, you need Javascript enabled to view it © The Author(s) 2016 219 M. Wulfgramm et al. (eds.), Welfare State Transformations andInequality in OECD Countries, Transformations of the State, DOI 10.1057/978-1-137-51184-3_10
  • [2] 2
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