Revisiting dualism. The governance of the low pay-low skill labour market in four European countries

Abstract

The permanent restructuring of the economy, exacerbated by the digital transition and labour market dualization, is progressively increasing the risk of marginalization for semi- and low-skilled workers. This article analyses how Germany, France, Italy, and Spain balance employment and equality concerns in core private service sectors and examines the policy strategies implemented over the last decade for workers ‘at the margins’. The analysis considers multiple tools – skill upgrading, social benefits, incentives to reduce barriers to employment, and wage regulation – and reveals divergent trajectories. Germany and Spain share a common direction, adopting protective policies to mitigate long-standing labour market dualism and improve job conditions for low-wage and at-risk workers. France remains locked in a protective approach, prioritizing job stabilization through subsidies but neglecting skill development, which constrains long-term mobility. Italy, by contrast, exacerbates dualism by failing to improve job quality and training opportunities, resulting in persistent low productivity and rising in-work poverty.