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Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?

Author

Listed:
  • Cahuc, Pierre

    (Sciences Po, Paris)

  • Charlot, Olivier

    (University of Cergy-Pontoise)

  • Malherbet, Franck

    (CREST (ENSAE))

  • Benghalem, Helène

    (University of Lausanne)

  • Limon, Emeline

    (University of Cergy-Pontoise)

Abstract

This paper analyzes the consequences of the taxation of temporary jobs recently introduced in several European countries to induce firms to create more open-ended contracts and to increase the duration of jobs. The estimation of a job search and matching model on French data shows that the taxation of temporary jobs does not reach its objectives: it reduces the mean duration of jobs and decreases job creation, employment and welfare of unemployed workers. We find that a reform introducing an open-ended contract without layout costs for separations occurring at short tenure would have opposite effects.

Suggested Citation

  • Cahuc, Pierre & Charlot, Olivier & Malherbet, Franck & Benghalem, Helène & Limon, Emeline, 2016. "Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?," IZA Discussion Papers 10352, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10352
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    References listed on IDEAS

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    1. Daniel Borowczyk-Martins & Gregory Jolivet & Fabien Postel-Vinay, 2013. "Accounting For Endogeneity in Matching Function Estimation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(3), pages 440-451, July.
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    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?
      by maximorossi in NEP-LTV blog on 2016-11-23 21:35:51

    Citations

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    Cited by:

    1. Cahuc, Pierre & Carry, Pauline & Malherbet, Franck & Martins, Pedro, 2022. "Employment Effects of Restricting Fixed-Term Contracts: Theory and Evidence," CEPR Discussion Papers 16875, C.E.P.R. Discussion Papers.
    2. Bentolila, Samuel & Dolado, Juan J. & Jimeno, Juan F., 2019. "Dual Labour Markets Revisited," IZA Discussion Papers 12126, Institute of Labor Economics (IZA).
    3. Kabátek, Jan & Liang, Ying & Zheng, Kun, 2022. "Are Shorter Cumulative Temporary Contracts Worse Stepping Stones? Evidence from a Quasi-Natural Experiment," IZA Discussion Papers 15407, Institute of Labor Economics (IZA).
    4. Zheng, Kun, 2019. "Essays on duration analysis and labour economics," Other publications TiSEM 6467229e-a10b-4d8d-acaf-c, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    taxation; employment protection legislation; temporary jobs;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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