Labor Market Dualization and Realignment of Party Competition: A Comparative Case Study of France, Germany, and Japan

Prof. Takuji Tanaka

Over the past two decades, developed countries have been faced with growing inequalities. In particular, labor market dualization has attracted great attentions among scholars. Some have argued that the divide between insiders and outsiders has undermined supporters of left parties. As left parties considered insiders as their core constituency, they were faced with a strategic dilemma. However, existing literature on dualization does not share common understandings on the definition of insiders and outsiders, their policy preferences, and the impact of dualization on party competition. This paper examines how labor market dualization affects left-right party competition in three countries under conservative regimes: France, Germany, and Japan.
First, this paper compares the dualization of the three countries using quantitative data from the past two decades. It defines insiders and outsiders by employment and social protections from old and new social risks. Although labor market dualization has been observed in all three countries, the degree of dualization varies. While dualization in France is smaller, in Germany, it is intermediate; in Japan, it is the largest.
Second, this paper compares the influence of dualization on left-right party competition by using a process-tracing approach. As previous literature pointed out, insiders and outsiders had different policy preferences and the left parties have lost their political influence due to strategic dilemmas caused by dualization. However, the influence of dualization on party competition is diverse. In France, political polarization worsened, and radical right and left parties progressed. In Germany, the major left party formed a coalition with the center-right party. In Japan, a center-right party maintained a stable government despite the growing labor market dualization. By examining voters' attitude surveys, political party bulletins, and manifest data, this paper reveals the causes of the different consequences of labor market dualization.