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Hiring young, unskilled workers on subsidized open-ended contracts: a good integration programme?

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  • Muriel Roger

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Philippe Zamora

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

Abstract

Young labour-market entrants account for a high level of unemployment and short-term contracts. In July 2002, the French government moved to reduce this insecurity at the start of working life by introducing the Youth-in-business Contract (Contrat Jeune en Entreprise), a new contract for young people under 22 years old who dropped out of school before passing their final secondary school examinations. Under this scheme, firms were entitled to claim a subsidy when they hired an eligible young worker on an open-ended contract. We assess the impact of the Youth-in-business Contract on transitions to permanent employment by estimating a dynamic difference-in-difference model drawing on the French Labour Force Survey. We use a new method, inspired by Keane and Sauer (2009), to deal with measurement errors in the data. We find that programme eligibility has no effect on transitions to permanent employment in a recession environment.

Suggested Citation

  • Muriel Roger & Philippe Zamora, 2011. "Hiring young, unskilled workers on subsidized open-ended contracts: a good integration programme?," PSE-Ecole d'économie de Paris (Postprint) halshs-00754538, HAL.
    • Handle: RePEc:hal:pseptp:halshs-00754538
    DOI: 10.1093/oxrep/grr016
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    Cited by:

    1. Zimmermann, Klaus F. & Biavaschi, Costanza & Eichhorst, Werner & Giulietti, Corrado & Kendzia, Michael J. & Muravyev, Alexander & Pieters, Janneke & Rodríguez-Planas, Núria & Schmidl, Ricarda, 2013. "Youth Unemployment and Vocational Training," Foundations and Trends(R) in Microeconomics, now publishers, vol. 9(1–2), pages 1-157, December.
    2. Efstathiou, Konstantinos & Mathä, Thomas Y. & Veiga, Cindy & Wintr, Ladislav, 2019. "Active labour market policy use in Luxembourg: evidence from a firm survey," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 53(1), pages 1-12.
    3. Albanese, Andrea & Cockx, Bart & Dejemeppe, Muriel, 2024. "Long-term effects of hiring subsidies for low-educated unemployed youths," Journal of Public Economics, Elsevier, vol. 235(C).
    4. Çetin ÇELİK, 2020. "The Performance of Education System in Different Welfare Regimes in School to Work Transitions: Denmark, France, Spain, Greece, and TurkeyAbstract: School systems and their links with the labor market," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(45).
    5. Eichhorst, Werner & Rodríguez-Planas, Núria & Schmidl, Ricarda & Zimmermann, Klaus F., 2012. "A Roadmap to Vocational Education and Training Systems Around the World," IZA Discussion Papers 7110, Institute of Labor Economics (IZA).
    6. Werner Eichhorst & Núria Rodríguez-Planas & Ricarda Schmidl & Klaus F. Zimmermann, 2015. "A Road Map to Vocational Education and Training in Industrialized Countries," ILR Review, Cornell University, ILR School, vol. 68(2), pages 314-337, March.
    7. Floreani, Vincent Arthur, 2014. "Fixing Europe's youth unemployment and skills mismatch, can public financial support to SMEs be effective? The case of the European Commission and European Investment Bank joint initiatives," MPRA Paper 55849, University Library of Munich, Germany.

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