Assistance et Emploi. Le comportement des allocataires du RMI face aux politiques publiques d’incitation à l’emploi

Stephane Gauthier

No 2008-01, Working Papers from Center for Research in Economics and Statistics

Abstract: This paper is a theoretical analysis of disincentive effects caused bythe French Guaranteed Minimum Income (RMI) on labor supply in anon-stationary dynamical search framework. This program, as most ofwelfare programs in use in other countries, imposes high marginal taxrates on wages at the bottom of income distribution, a feature whichhas come as a justification for implementing an additional scheme,called "intéressement", whose purpose is to reduce effective marginaltax rates. This paper does suggest that such a scheme either issuperfluous, in the sense that it does not succeed to affect work incentives,or it favors labor turnover. The first property arises wheneverintéressement is not generous enough and is intended only for thosepeople who stay in welfare once employed. The second property followsfrom the provisional nature of intéressement, which provides greaterincentives to leave employment at the end of the intéressement spell.

Pages: 155
Date: 2008
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