On the outside looking in? Transitions out of non-employment in the United Kingdom and Germany

Abstract

This article investigates differences in the likelihood of becoming an insider in Germany and the United Kingdom. Consistent with recent literature on dualization it contends that insider protection is more pronounced in the corporatist system and conservative welfare state of Germany. In conjunction with micro-level labour market sociology, the study argues that this affects the job matching process of the labour market. Using individual level panel data in event history models, it contrasts leaving non-employment for an insider position, that is, permanent full-time employment, with staying on the outside of the core labour market, that is, remaining without employment or taking up an atypical job. Results demonstrate that insider positions are harder to attain in the German labour market as a consequence of the institutional context that makes the said posts so appealing in the first place. At the same time, the German labour market regime strengthens the mechanisms of selection in terms of gender, age and education. The insider/outsider divide thus works in two ways. First, it increases inequality between insiders and outsiders in terms of economic and positional stability. Second, a stronger divide interacts with micro-level matching processes on the labour market. By reinforcing social differences in the chance to obtain an insider position, inequality is thus even further pronounced.