The French ?Earned Income Supplement? (RSA) and back-to-work incentives
AbstractUsing an inventory of local and/or non-statutory transfers in thirteen French towns and cities including Paris, Lyon and Marseille, we measure the gains from returning to work for recipients of means-tested benefits (RMI and API) by type of household. The reforms of national and statutory benefits carried out during the 2000s, especially those affecting the employment tax credit (PPE), failed to ensure that the recipients of meanstested benefits always stood to gain from returning to work. In most localities and for most types of household, taking a part-time job on the minimum wage represents a loss of income compared to staying on welfare, and full-time work does not always present any advantage. The effects of the reforms were offset by the effects of other measures such as the widespread provision of travel assistance by regional councils, the development of social tariffs for telephone and electricity, or exemption from paying the television licence fee. We then simulate the effects of introducing the RSA in place of the RMI. We take into account the way that local and/or non-statutory transfers ("droits connexes") are modified by the increases in national transfers. We observe that the RSA does indeed eliminate those areas where returning to work is unprofitable, for almost all localities and types of household. Lastly, we show that the marginal tax rate of 38 % chosen by the government in its bill is very close to the upper limit compatible with a back-to-work incentive.
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Bibliographic InfoPaper provided by TEPP Working Papers in its series Papers with number 2011-01.
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- Denis Anne & Yannick L'Horty, 2011. "The French "Earned Income Supplement" (RSA) and back-to-work incentives," Working Papers halshs-00812109, HAL.
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernard Salanié & Guy Laroque, 1999. "Prélèvements et transferts sociaux : une analyse descriptive des incitations financières au travail," Économie et Statistique, Programme National Persée, vol. 328(1), pages 3-19.
- Bernard Salanié & Guy Laroque, 2000. "Une décomposition du non-emploi en France," Économie et Statistique, Programme National Persée, vol. 331(1), pages 47-66.
- Marc Gurgand & David Margolis, 2001.
"RMI et revenus du travail : une évaluation des gains financiers à l'emploi,"
Économie et Statistique,
Programme National Persée, vol. 346(1), pages 103-122.
- Gurgand, M. & Margolis, D., 2001. "RMI et revenus du travail : une evaluation des gains financiers a l'emploi," Dossiers de recherche- 09, Centre d'etudes de l'emploi.
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