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Basic Income/Minimum Wage Schedule and the Occurrence of Inactivity Traps : Some Evidence on the French Labor Market

Author

Listed:
  • Thierry Laurent

    (EPEE, Center for Economic Policy Studies)

  • Yannick L’Horty

Abstract

The aim of this paper is to suggest an economic modeling of labor force participation microeconomic decisions in an inter-temporal framework characterized by the occurrence of a basic incomes/minimum wage scheme. We use the observed probabilities of transitions between different kind of jobs on the French labor market, for different categories of workers (age, sex, skills etc.), and the observed incomes associated to each kind of job, to identify the categories of workers that face inactivity or poverty trap problems. The results show (i) the occurrence of important inequalities between workers concerning the "inter-temporal" return of work and, consequently, the incentive to work, (ii) no obvious link between the occurrence of a static trap (work does not pay in the short run) and incentive to work problems. Moreover the results stress that unskilled male workers do have interest to accept jobs that do not pay, while skilled male workers do not have interest to accept jobs that do pay.

Suggested Citation

  • Thierry Laurent & Yannick L’Horty, 2003. "Basic Income/Minimum Wage Schedule and the Occurrence of Inactivity Traps : Some Evidence on the French Labor Market," Documents de recherche 03-01, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:03-01
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    More about this item

    Keywords

    Minimum Income; Poverty Traps; Jobs Transitions;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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