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Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?

Author

Listed:
  • Cahuc, Pierre

    () (Ecole Polytechnique, Paris)

  • Charlot, Olivier

    () (University of Cergy-Pontoise)

  • Malherbet, Franck

    () (CREST (ENSAE))

  • Benghalem, Helène

    () (CREST)

  • 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 for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10352
    as

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    References listed on IDEAS

    as
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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

    More about this item

    Keywords

    temporary jobs; employment protection legislation; taxation;

    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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