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The Detaxation of Overtime Hours: Lessons from the French Experiment

Author

Listed:
  • Pierre Cahuc

    (X - École polytechnique, ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique, CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz])

  • Stéphane Carcillo

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

In October 2007, France introduced an exemption on the income tax and social security contributions that applied to wages received for hours worked overtime. The goal of the policy was to increase the number of hours worked. This article shows that this reform has had no significant impact on hours worked. Conversely, it has had a positive impact on the overtime hours declared by highly qualified wage earners, who have opportunities to manipulate the overtime hours they declare in order to optimize their tax situation since the hours they work are difficult to verify.

Suggested Citation

  • Pierre Cahuc & Stéphane Carcillo, 2014. "The Detaxation of Overtime Hours: Lessons from the French Experiment," SciencePo Working papers Main hal-03460334, HAL.
    • Handle: RePEc:hal:spmain:hal-03460334
    DOI: 10.1086/674987
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03460334
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    References listed on IDEAS

    as
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    7. Matthieu Chemin & Etienne Wasmer, 2009. "Using Alsace-Moselle Local Laws to Build a Difference-in-Differences Estimation Strategy of the Employment Effects of the 35-Hour Workweek Regulation in France," SciencePo Working papers hal-03461753, HAL.
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    Cited by:

    1. Erich Battistin & Agar Brugiavini & Enrico Rettore & Guglielmo Weber, 2009. "The Retirement Consumption Puzzle: Evidence from a Regression Discontinuity Approach," American Economic Review, American Economic Association, vol. 99(5), pages 2209-2226, December.
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    4. Olivier Godechot, 2009. "L'Alsace-Moselle peut-elle décider des 35 heures ?," SciencePo Working papers Main hal-01391560, HAL.
    5. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," Working Papers hal-04067393, HAL.

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