Evaluating the impact of the French tax credit on the employment rate of women
AbstractThis paper investigates the employment impact of a new tax-credit programme that was put in place in France in 2001. According to the theoretical labour supply model, tax credits will have a positive effect on individual labour market participation as they increase the rewards from work. However, tax credits may discourage married women's participation mainly due to income effects. We analyse the introduction of the French measure by adopting a non-experimental evaluation method. Various treatment and control groups are defined. The first specification adopted relies on the policy eligibility rules for the construction of the control and treatment groups. The others hinge, respectively, on marital status, for women in couple-households, and on the presence of children, for single women. We find evidence of a negative employment effect for married women, with a reduction of about three percentage points in the employment rate after the introduction of the policy. In particular, it seems to be the conditioning on total household resources that discourages married women's labour market participation. On the contrary, the employment impact of the measure is positive for cohabiting women and twice as large. The policy effect is very small and statistically not significant for single women. The net impact of the introduction of the tax credit on the total employment of women is very marginal, amounting to the creation of about two thousand new jobs.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 92 (2008)
Issue (Month): 10-11 (October)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505578
C34 I38 J21 Policy evaluation Difference-in-differences estimator Labour supply;
Other versions of this item:
- Elena Stancanelli, 2007. "Evaluating the impact of the French tax credit on the employment rate of women," Documents de Travail de l'OFCE 2007-33, Observatoire Francais des Conjonctures Economiques (OFCE).
- C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
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