Do Hiring Credits Work in Recessions? Evidence from France

53 Pages Posted: 19 Jul 2014

See all articles by Pierre Cahuc

Pierre Cahuc

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); University of Angers - French National Center for Scientific Research (CNRS); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Stéphane Carcillo

Organisation for Economic Co-operation and Development (OECD); Sciences Po; IZA

Thomas Le Barbanchon

Bocconi university; Centre for Economic Policy Research (CEPR)

Abstract

This paper evaluates the impact of an unexpected temporary hiring credit targeted at workers paid below 1.6 times the minimum wage in firms with less than 10 employees in France from December 2008 to December 2009. Using rich administrative data covering all French firms, we find that the program has had a strong and rapid impact on employment. The net cost per job created for the government was around zero. The employment effect was stronger in areas where recruitment was easier. Although the hiring credit was not conditional on net job creation, it did not increase churning of workers. Nevertheless, we estimate that a credit conditional on net job creation above the employment growth threshold of -1%; would have maximized job creation, and created 1.8 times more jobs, at constant budget, provided that take-up had remained the same.

Keywords: hiring credit, labor demand

JEL Classification: C31, C93, J6

Suggested Citation

Cahuc, Pierre and Carcillo, Stephane and Le Barbanchon, Thomas, Do Hiring Credits Work in Recessions? Evidence from France. IZA Discussion Paper No. 8330. Available at SSRN: https://ssrn.com/abstract=2468506

Pierre Cahuc (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

92245 Malakoff Cedex
France

Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA) ( email )

106-112 Boulevard de l'Hopital
Paris Cedex 13, 75647
France
+33 1 4117 3717 (Phone)
+33 1 4117 3724 (Fax)

HOME PAGE: http://eurequa.univ-paris1.fr/membres/cahuc/

University of Angers - French National Center for Scientific Research (CNRS)

106-112 Boulevard de l'Hopital
75647 Paris Cedex 13
France
+33 4 44 07 82 06 (Phone)
+33 4 44 07 82 02 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Stephane Carcillo

Organisation for Economic Co-operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Sciences Po ( email )

28 rue des Saints peres
Paris, 75007
France

IZA ( email )

Thomas Le Barbanchon

Bocconi university ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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