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

Author

Listed:
  • Clément Carbonnier

    (Université de Cergy Pontoise)

  • Bruno Palier

    (Centre d'études européennes et de politique comparée)

  • Michael Zemmour

    (Université Paris 1 Panthéon-Sorbonne)

Abstract

Tax expenditures are widely used by French governments as employment 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.

Suggested Citation

  • Clément Carbonnier & Bruno Palier & Michael Zemmour, 2014. "Tax cuts or social investment? Evaluating the opportunity cost of the French employment strategy," Sciences Po publications 31, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/18k79jk7138279qstaf2rdulvu
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Clément Carbonnier, 2023. "Welfare Economics and Neoliberalism: Interpreting the ideal type of perfect competition general equilibrium," Working Papers hal-04062786, HAL.
    3. Clément Carbonnier & Simon Fredon & Benoît Gauthier & Clément Malgouyres & Thierry Mayer & Loriane Py & Gwenaële Rot & Camille Urvoy, 2016. "Evaluation interdisciplinaire des impacts du CICE en matière de compétitivité internationale, d'investissement, d'emploi, de résultat net des entreprises et de salaires," Sciences Po publications info:hdl:2441/4v8c8tnfgu8, Sciences Po.
    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. Clément Carbonnier & Clément Malgouyres & Loriane Py & Camille Urvoy & Charlotte Foffano, 2018. "Évaluation interdisciplinaire des impacts du CICE en matière d’emplois et de salaires: Rapport du Laboratoire Interdisciplinaire d’Évaluation des Politiques Publiques (LIEPP) de Sciences Po en réponse," Sciences Po publications info:hdl:2441/71qdj9669e8, Sciences Po.
    6. repec:hal:spmain:info:hdl:2441/4v8c8tnfgu8g392dpm6uaefuus is not listed on IDEAS
    7. repec:hal:spmain:info:hdl:2441/71qdj9669e8dore9fmfi4a8m42 is not listed on IDEAS
    8. Agustin Redonda, 2016. "Tax Expenditures and Sustainability. An Overview," Discussion Notes 1603, Council on Economic Policies.
    9. Askenazy, Philippe & Palier, Bruno, 2018. "France: rising precariousness supported by the welfare state," CEPREMAP Working Papers (Docweb) 1801, CEPREMAP.

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