Subsidized temporary jobs in France: lock-in and stepping stone effects

L'activité réduite: effet d'enfermement et effet tremplin

Antoine Terracol and Florent Fremigacci ()

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Abstract: This article evaluates the effectiveness of subsidized temporary jobs as stepping stones to regular employment. We study a French program that allows job seekers to work part-time while remaining registered with the unemployment agency. We find that subsidized temporary jobs have both a significant lock-in effect and a significant positive post-treatment impact on the hazard rate to employment. Since individuals facing a low financial incentive to work part-time also have incentives to self-select into better part-time jobs, we also find that a higher tax rate leads to a weaker lock-in effect and a stronger post-treatment effect. Simulations suggest that the lock-in effect first dominates, but that the overall effect eventually becomes positive. We finally point to ways of improving the effectiveness of the policy.

Keywords: reduced activity; unemployment duration; evaluation of public policies; Activité réduite; Travail; reprise d'emploi; évaluation des politiques publiques (search for similar items in EconPapers)
Date: 2014
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Published in Travail et Emploi, 2014, 139, pp.25-37

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Working Paper: Subsidized temporary jobs in France: lock-in and stepping stone effects (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01071197

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