‪L’activité réduite en France‪. Effet d’enfermement et effet tremplin

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.