Labor markets have been segmented typically based on skill-levels of workers in the United States and in many other economically advanced countries. Since welfare reform 1996, the welfare system in the United States has increasingly linked labor market participation to the eligibility for public benefits. This development signals a shift in public responsibility for economic security and social protection to the private sector and employers. However, welfare recipients are mostly low-income workers and, as outsiders in the labor market, they often have disadvantages, which include limited employment benefits. Therefore, the relationship between labor market and social protection for low-income workers has continuously increased economic inequality and disparity in social protection in the United States.
This dissertation research draws on the theoretical concepts of dualization embedded in the structures of the labor market and social protection derived from the welfare state. Focusing on economic disparities and social protection for low-income workers, this study analyzes public benefit use by low-income workers and the effects of changes in economic conditions. Specifically, the analyses focus on the extent to which low-income workers use public benefits and the way these choices are related to public and private employment sectors and employer-based private benefits in particular. It also examines how different characteristics of individual, family and household, and other labor market components are associated with public benefit use by low-income workers; the analyses include the differences between household and state levels regarding the public benefit use. Statistical analyses for these inquiries involve cross-sectional and multilevel modeling of large scale data sets.
The findings of this study show that many low-income workers cannot obtain economic security and adequate social protection through employers, given current labor market structure. Also, these findings indicate that the employment conditions and benefits provided through employers are already determined by the low-level segmentation in the labor market, rather than the public and private sectors in which low-income workers are engaged. Thus, the dualization process has increased the inequality between insiders and outsiders, which strengthens the social divide.