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Hiring young, unskilled workers on subsidized open-ended contracts: a good integration programme?

  • Muriel Roger
  • Philippe Zamora

Young labour-market entrants account for a high level of unemployment and short-term contracts. In July 2002, the French government moved to reduce this insecurity at the start of working life by introducing the Youth-in-business Contract ( Contrat Jeune en Entreprise ), a new contract for young people under 22 years old who dropped out of school before passing their final secondary school examinations. Under this scheme, firms were entitled to claim a subsidy when they hired an eligible young worker on an open-ended contract. We assess the impact of the Youth-in-business Contract on transitions to permanent employment by estimating a dynamic difference-in-difference model drawing on the French Labour Force Survey. We use a new method, inspired by Keane and Sauer (2009) , to deal with measurement errors in the data. We find that programme eligibility has no effect on transitions to permanent employment in a recession environment. Copyright 2011, Oxford University Press.

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Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 27 (2011)
Issue (Month): 2 ()
Pages: 380-396

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Handle: RePEc:oup:oxford:v:27:y:2011:i:2:p:380-396
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