The Effects of Reduced Social Security Contributions on Employment: an Evaluation of the 2003 French Reform
In 2003, the French government decided to reform the system managing the different minimum wage regulations and the targeted reductions to employers' social security contributions. The main objective of the reform was to simplify the complex regulations that were created by the progressive introduction of the 35-hour week. The reform incidentally created large variations in labour costs, depending on the type of firm and the wage level within the firm. This paper presents an evaluation of the impact of this reform on employment using a balanced panel of firms with more than five employees, drawn from a matching between several administrative data sources from 2000 to 2005. In both types of firm, significant employment elasticities can be found with respect to labour costs that have the expected signs: a rise of 1% in average labour costs reduces employment by 0.4%. As the majority of firms that remained on the 39-hour week received greater reductions, the Fillon reform allowed them to raise their level of employment. Firms that adopted the 35-hour week experienced the opposite: the reform led to a fall in employment. Ultimately, the Fillon reform has had no clear effect on aggregate employment, measured either in job numbers or full-time equivalents (FTE).
|Date of creation:||2012|
|Date of revision:|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00856211|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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.:
- Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2010.
"CEM: Coarsened Exact Matching in Stata,"
BOS10 Stata Conference
8, Stata Users Group.
- Giuseppe Porro & Stefano Maria Iacus, 2009.
"Random Recursive Partitioning: a matching method for the estimation of the average treatment effect,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 24(1), pages 163-185.
- Stefano Iacus & Giuseppe Porro, 2006. "Random recursive partitioning: a matching method for the estimation of the average treatment effect," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1018, Universitá degli Studi di Milano.
- A. Kugler, M. Kugler, 2008.
"Labour Market Effects of Payroll Taxes in Developing Countries: Evidence from Colombia,"
eg0056, Wilfrid Laurier University, Department of Economics, revised 2008.
- Adriana Kugler & Maurice Kugler, 2009. "Labor Market Effects of Payroll Taxes in Developing Countries: Evidence from Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 335-358, 01.
- Adriana Kugler & Maurice Kugler, 2008. "Labor Market Effects of Payroll Taxes in Developing Countries: Evidence from Colombia," NBER Working Papers 13855, National Bureau of Economic Research, Inc.
- Kramarz, Francis & Philippon, Thomas, 2000.
"The Impact of Differential Payroll Tax Subsidies on Minimum Wage Employment,"
IZA Discussion Papers
219, Institute for the Study of Labor (IZA).
- Kramarz, Francis & Philippon, Thomas, 2001. "The impact of differential payroll tax subsidies on minimum wage employment," Journal of Public Economics, Elsevier, vol. 82(1), pages 115-146, October.
- Francis Kramarz & Thomas Philippon, 2000. "The Impact of Differenctial Payroll Tax Subsidies on Minimum Wage Employment," Working Papers 2000-10, Centre de Recherche en Economie et Statistique.
- Rajeev H. Dehejia & Sadek Wahba, 2002.
"Propensity Score-Matching Methods For Nonexperimental Causal Studies,"
The Review of Economics and Statistics,
MIT Press, vol. 84(1), pages 151-161, February.
- Rajeev H. Dehejia & Sadek Wahba, 1998. "Propensity Score Matching Methods for Non-experimental Causal Studies," NBER Working Papers 6829, National Bureau of Economic Research, Inc.
- Lechner, Michael, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA).
- Islem Gafsi & Yannick L’Horty & Ferhat Mihoubi, 2004. "Vingt ans d’évolution de l’emploi peu qualifié et du coût du travail : des ruptures qui coïncident ?," Documents de recherche 04-02, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
- Brittain, John A, 1971. "The Incidence of Social Security Payroll Taxes," American Economic Review, American Economic Association, vol. 61(1), pages 110-25, March.
- Stefano Iacus & Gary King & Giuseppe Porro, . "cem: Software for Coarsened Exact Matching," Journal of Statistical Software, American Statistical Association, vol. 30(i09).
- Mathieu Bunel, 2004.
"Aides incitatives et déterminants des embauches des établissements passés à 35 heures,"
- Matthieu Bunel, 2004. "Aides incitatives et déterminants des embauches des établissements passés aux 35 heures," Économie et Statistique, Programme National Persée, vol. 376(1), pages 91-115.
- Gruber, Jonathan, 1997.
"The Incidence of Payroll Taxation: Evidence from Chile,"
Journal of Labor Economics,
University of Chicago Press, vol. 15(3), pages S72-101, July.
- Jonathan Gruber, 1995. "The Incidence of Payroll Taxation: Evidence from Chile," NBER Working Papers 5053, National Bureau of Economic Research, Inc.
- Yannick L’Horty & Fabrice Gilles & Matthieu Bunel, 2009.
"Les effets des allégements de cotisations sociales sur l’emploi et les salaires : une évaluation de la réforme de 2003,"
Économie et Statistique,
Programme National Persée, vol. 429(1), pages 77-105.
- Mathieu Bunel & Fabrice Gilles & Yannick L'Horty, 2009. "Les effets des allégements de cotisations sociales sur l'emploi et les salaires : Une évaluation de la réforme de 2003," Post-Print halshs-00658475, HAL.
- Markus Froelich, 2002.
"Programme Evaluation with Multiple Treatments,"
University of St. Gallen Department of Economics working paper series 2002
2002-17, Department of Economics, University of St. Gallen.
- Vroman, Wayne, 1974. "Employer Payroll Tax Incidence: Empirical Tests with Cross-Country Data," Public Finance = Finances publiques, , vol. 29(2), pages 184-200.
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-00856211. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.