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

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  • Bruno Palier

    (CEE - Centre d'études européennes et de politique comparée (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)

  • Clément Carbonnier

    (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)

  • Michaël Zemmour

    (CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

Tax expenditures are widely used by French governments as em-ployment 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 pri-vately 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 consum-ers) as well as any positive economic and social externalities.

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  • Bruno Palier & Clément Carbonnier & Michaël Zemmour, 2014. "Tax cuts or social investment? Evaluating the opportunity cost of French employment strategy," Working Papers hal-01017683, HAL.
    • Handle: RePEc:hal:wpaper:hal-01017683
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01017683
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    References listed on IDEAS

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    1. Lucie Davoine & Christine Erhel, 2006. "Monitoring Employment Quality in Europe: European Employment Strategy Indicators and Beyond," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00272015, HAL.
    2. 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.
    3. Annamaria Simonazzi, 2009. "Care regimes and national employment models," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(2), pages 211-232, March.
    4. 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.
    5. Bruno Palier & Kathleen Thelen, 2010. "Institutionalizing Dualism: Complementarities and Change in France and Germany," Politics & Society, , vol. 38(1), pages 119-148, March.
    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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    3. 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.
    4. 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.
    5. Agustin Redonda, 2016. "Tax Expenditures and Sustainability. An Overview," Discussion Notes 1603, Council on Economic Policies.
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    7. Clément Carbonnier, 2023. "Welfare Economics and Neoliberalism: Interpreting the ideal type of perfect competition general equilibrium," SciencePo Working papers Main hal-04062786, HAL.
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    9. Askenazy, Philippe & Palier, Bruno, 2018. "France: rising precariousness supported by the welfare state," CEPREMAP Working Papers (Docweb) 1801, CEPREMAP.

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