Varieties of Economic Vulnerability: Evidence on Social Policy Preferences and Labor Informality from Mexico

Abstract

In many Latin American countries, social policy preferences among economically vulnerable citizens seem largely unpolarized. However, current studies rarely confront citizens with realistic policy options and often lack the required detail to capture the heterogeneity of economic vulnerability. Drawing on the dualization debate, we expect individuals facing different degrees of vulnerability to show distinct social policy preferences. Using original survey data from Mexico and a conjoint experiment, our findings reveal a complex divide, where the most economically vulnerable are least supportive of public solutions. Sharing the home with a formal labor market participant does not seem to mitigate social policy skepticism among the vulnerable. In contrast, magnified vulnerability via household composition reduces support for welfare policy expansion. Social policy preferences become much less distinct when policy design alternatives are introduced, suggesting reduced expectations about the state’s role and a lack of clarity about the tangible benefits of social policy reform.