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Tax cuts or social investment? Evaluating the opportunity cost of French employment strategy

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Listed:
  • Clément Carbonnier
  • Bruno Palier
  • Michaël Zemmour

Abstract

Tax expenditures are widely used by French governments as employment and social policies. Such programmes together amounted to more than 1.3 points of GDP in 2011. Thanks to a systematic review of academic policy evaluations, we assess the efficiency of the different parts of such policies, showing that at least €6 billion is used for policies whose cost is greater than €62,500 per year and job created, and €0.5 billion for policies whose cost is greater than €160,000 per year and job created. We examine the replacement of these tax expenditures by direct public funding for (publicly or privately delivered) "quality" jobs addressing specific social needs. We discuss the conditions under which at least comparable employment performances could be achieved (factoring in the crowding out of privately funded jobs and the properties of created jobs in terms of the service provided or the characteristics of suppliers and consumers) as well as any positive economic and social externalities.

Suggested Citation

  • Clément Carbonnier & Bruno Palier & Michaël Zemmour, 2016. "Tax cuts or social investment? Evaluating the opportunity cost of French employment strategy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(6), pages 1687-1705.
    • Handle: RePEc:oup:cambje:v:40:y:2016:i:6:p:1687-1705.
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    File URL: http://hdl.handle.net/10.1093/cje/bev080
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    References listed on IDEAS

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    1. Annamaria Simonazzi, 2009. "Care regimes and national employment models," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(2), pages 211-232, March.
    2. Lucie DAVOINE & Christine ERHEL & Mathilde GUERGOAT-LARIVIERE, 2008. "Monitoring quality in work: European Employment Strategy indicators and beyond," International Labour Review, International Labour Organization, vol. 147(2-3), pages 163-198, June.
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    5. Lucie Davoine & Christine Erhel & Mathilde Guergoat-Larivière, 2008. "Monitoring quality in work: european employment strategy indicators and beyond," PSE-Ecole d'économie de Paris (Postprint) halshs-00317347, HAL.
    6. Lucie Davoine & Christine Erhel & Mathilde Guergoat-Larivière, 2008. "Monitoring quality in work: european employment strategy indicators and beyond," Post-Print halshs-00317347, HAL.
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    Cited by:

    1. Clément Carbonnier, 2023. "Welfare Economics and Neoliberalism: Interpreting the ideal type of perfect competition general equilibrium," Working Papers hal-04062786, HAL.
    2. Eduardo Garzón Espinosa & Bibiana Medialdea García & Esteban Cruz Hidalgo, 2021. "Fiscal Policy Approaches: An Inquiring Look From The Modern Monetary Theory," Journal of Economic Issues, Taylor & Francis Journals, vol. 55(4), pages 999-1022, October.
    3. repec:hal:spmain:info:hdl:2441/71qdj9669e8dore9fmfi4a8m42 is not listed on IDEAS
    4. Lin, Boqiang & Jia, Zhijie, 2019. "Tax rate, government revenue and economic performance: A perspective of Laffer curve," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    5. repec:spo:wpmain:info:hdl:2441/4v8c8tnfgu8g392dpm6uaefuus is not listed on IDEAS
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    7. repec:hal:spmain:info:hdl:2441/4v8c8tnfgu8g392dpm6uaefuus is not listed on IDEAS
    8. Agustin Redonda, 2016. "Tax Expenditures and Sustainability. An Overview," Discussion Notes 1603, Council on Economic Policies.
    9. Askenazy, Philippe & Palier, Bruno, 2018. "France: rising precariousness supported by the welfare state," CEPREMAP Working Papers (Docweb) 1801, CEPREMAP.

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