Preferences on Redistribution in Fragmented Labor Markets in Latin America and the Caribbean

Abstract

This study investigates the extent to which labor market dualization polarizes preferences on redistribution between formal and informal sector workers in Latin America and the Caribbean. Differences in welfare state costs and benefits for these labor market groups are likely to fuel diverging incentives regarding welfare consumption. The article tests whether or not informal workers are driven mainly by economic self-interest to increase gains from public welfare goods. The study employed a hierarchical model on pooled survey data from the Latin American Public Opinion Project (LAPOP) 2008 and 2010 to analyze the risk exposure of formal and informal workers and, subsequently, their preferences on redistribution. The analysis reveals that while economic self-interest is an influential factor for formal workers, it is (unexpectedly) much less so for informal workers. Also, an increased economically insecure environment, reflected by high unemployment rates, does not motivate informal workers to an exceptional degree to turn towards the state for redistribution, despite greater exposure to economic risk. Labor market dualization does not translate into polarization at the individual level regarding redistributive preferences in Latin America and the Caribbean.

Opting for Exit: Informalization, Social Policy Discontent, and Lack of Good Governance

“…Second, to understand the development and growth of the informal sector, the analysis proposed that we need to distinguish voluntary from involuntary informality. As recent work from Baker and Velasco-Guachalla (2018) and Berens (2015b) has shown, there is little empirical evidence of a cleavage between informal and formal sector workers—both groups have similar social policy preferences. Some of this missing evidence for dual- ization might be related to the treatment of informal sector workers as a homogeneous group.…”

“…The dependent variable, being a self-employed informal, is measured with survey data from the Latin American Public Opinion Project (LAPOP) for the years 2008 and 2010 for 24 LAC countries 3 . This analysis concentrates on informals who consider themselves informally self-employed, going back to Hart’s 1973 classification of informals by their status of self-employment and simultaneous lack of contribution-based benefits (health insurance), following Berens (2015b) and Baker and Velasco-Guachalla (2018). 4…”

Labor Divides, Informality, and Regulation: The Public Opinion on Labor Law in Latin America

“…Holland (2016) and Feierherd (2017) reveal for the Latin American context that especially left parties benefit from varying the degree of labor law enforcement to reach out to both insiders and outsiders. This could explain why labor market segmentation does not seem to polarise on questions of social policy Mares, 2014, 2015;Berens, 2015aBerens, , 2015b nor to other clearly distinguishable voting patterns (Baker and Velasco-Guachalla, 2018). Would this also be true for the dividing line along the protective function of labor law?…”

“…More recently, scholars have used this divide to explain policies of redistribution and insurance, such as the recent move towards tax-financed minimal pensions (Carnes and Mares, 2013), or to analyse attitudes towards public versus private healthcare and pension provision (Berens, 2015a). One puzzling finding from this literature is, however, the "non-divide" on these issues (Berens, 2015b;Baker and Velasco-Guachalla, 2018). And yet, since jobs have a much larger meaning in people's lives than just the instrumental value of generating income, it is worth looking at how people position themselves on the regulative questions about labor and how far the actual divide is about labor law rather than social policy.…”

El resurgimiento de la economía política en la ciencia política actual

“…La manera inductiva para determinar los intereses, menos utilizada porque es intensiva en material empírico, consiste en utilizar encuestas de opinión y estudios de estratificación social para identificar las preferencias distributivas (Amable, 2009;Berens, 2015).…”