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Subsidized temporary jobs in France: lock-in and stepping stone effects
[L'activité réduite : effet d'enfermement et effet tremplin]

Author

Listed:
  • Antoine Terracol

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Florent Fremigacci

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article evaluates the effectiveness of subsidized temporary jobs as stepping stones to regular employment. We study a French program that allows job seekers to work part-time while remaining registered with the unemployment agency. We find that subsidized temporary jobs have both a significant lock-in effect and a significant positive post-treatment impact on the hazard rate to employment. Since individuals facing a low financial incentive to work part-time also have incentives to self-select into better part-time jobs, we also find that a higher tax rate leads to a weaker lock-in effect and a stronger post-treatment effect. Simulations suggest that the lock-in effect first dominates, but that the overall effect eventually becomes positive. We finally point to ways of improving the effectiveness of the policy.

Suggested Citation

  • Antoine Terracol & Florent Fremigacci, 2014. "Subsidized temporary jobs in France: lock-in and stepping stone effects [L'activité réduite : effet d'enfermement et effet tremplin]," Post-Print hal-01071197, HAL.
    • Handle: RePEc:hal:journl:hal-01071197
    as

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