How We Grow More Unequal

Abstract : This chapter introduces the concept of dualization. Poverty, inequality, and social exclusion are back on the political agenda in many rich democracies of Western Europe and North America, not only as a consequence of the Great Recession that hit the global economy in 2008. It argues that the translation of structural pressures into policies and outcomes has to be understood as a political process. Dualization is a political process that is characterized by the differential treatment of insiders and outsiders and that can take the form of newly created institutional dualisms or the deepening of existing institutional dualisms (policy output). Thereby, changes in the labor market are translated into the social policy realm, where new distinctions arise or old institutional distinctions are re-activated. Feedback effects and vicious circles are likely to strengthen this effect because weak labor attachment and social exclusion are associated with weaker political representation.