The French Work Bonus: Building on American Blocks
Cahiers du CEREN, Vol. 1, pp. 14-22, 2002
9 Pages Posted: 11 Sep 2006
The French minimum wage depressed the demand for labor. Coupled with unemployment benefits, it adversely distorted the supply of labor. To stimulate people to work, the government created a tax credit for the working poor and called it a Work Bonus. The Bonus alleviates the twin problems. It creates a subsidy to labor, similar to the EITC in the US. Although it complicates the French economic system, it has been retained as a solution owing to its window dressing impact as much as for its activity based anti-poverty approach. The paper provides a description of the measure and comments upon it.
Keywords: Work Bonus, EITC, WFTC, Prime pour l'emploi, French employment, French taxation
JEL Classification: A14, E24, E62, H55, I38, J23, J65
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