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Evaluating the Impact of the French tax credit on the employment rate of women

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  • Elena Stancanelli

    (Observatoire français des conjonctures économiques)

Abstract

This paper investigates the employment impact of a new tax-credit programme that was put in place in France in 2001. We study the introduction of both this measure and a later reform in 2004 that made the tax credit cashable in advance upon returning to work. We adopt a non-experimental evaluation method. The data for the analysis are drawn from the French Labour Force Surveys over the period 1999 to 2005. Due to the break in the French LFS series in 2003, we analyze separately the two periods 1999-2002 and 2003-05, as well as pooling the data over 1999-2005, under particular assumptions. We find evidence of a significantly negative employment effect for married women, with a reduction of about 3.2-3.4 percentage points in their employment rate after the introduction of the policy. The impact is positive and weakly significant for cohabiting women, while positive but statistically insignificant for lone mothers. We do not find any evidence of an additional effect of the tax credit due to the cashable advance credit reform of 2004.

Suggested Citation

  • Elena Stancanelli, 2007. "Evaluating the Impact of the French tax credit on the employment rate of women," Sciences Po publications N°2007-33, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/2202
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    More about this item

    Keywords

    policy evaluation; difference-in-differences estimator; labour supply;
    All these keywords.

    JEL classification:

    • 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, Well-Being, 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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