What would be the effect of an increase in the minimum wage in France on household living standards? Has the expansion of apprenticeships helped reduce youth poverty? What have been the consequences of the 2019 and 2023 unemployment insurance reforms? These are among the questions addressed by this research project, which seeks to improve our understanding of how employment policies and the tax-benefit system interact in France.
Situated at the intersection of labour economics and social protection, the project explores the redistributive effects of employment and labour market policies in France from three complementary perspectives: (1) policies affecting the level and distribution of wages; (2) unemployment insurance rules; and (3) employment subsidy schemes. Its main methodological contribution is the use of the INES microsimulation model, jointly developed by INSEE, the Cnaf, and the DREES, which simulates the French tax-benefit system in its entirety, including social and family benefits, income taxation, and social security contributions.
The project has already resulted in a first study examining how changes in the distribution of jobs by hourly wage affect total expenditure on the Prime d’activité (the French in-work benefit). By simulating a reform of employers’ social security contribution reductions, the study shows that the resulting decrease in total Prime d’activité expenditure would in fact be marginal. The findings contributed to the interim report of the government-appointed commission on the interaction between wages, labour costs, and the Prime d’activité, as well as its effects on employment, wage levels, and economic activity, chaired by Antoine Bozio and Etienne Wasmer.