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Abstract This chapter demonstrates that the extent to which labor market segmentation leads to economic, social and political insider-outsider divides depends on the institutional context. Based on survey and income data, it shows that both the composition, as well as the economic and social situation of insiders and outsiders varies across countries and welfare regimes. The share of outsiders is highest in liberal and continental countries, followed by the Nordic and Southern European countries. In a comparative perspective, insider-outsider divides appear to be strongest in continental Europe, with regard to all three dimensions examined: labor market inequalities, welfare inequalities and political integration. The upshot of the chapter is that policies matter: they can compensate, reproduce or even deepen insider-outsider divides.
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