Reductions In Social Contributions Research Articles

Quarante ans d’évolution de l’offre et de la demande de travail par qualification – Progrès technique, coût du travail et transformation sociale”

[eng] In France, the proportion of unskilled non manual jobs is higher today than forty years ago, especially in personal service sectors. However, these unskilled jobs are only growing in occupations where employers enjoy significant reductions in social contributions and only in periods when these reductions are mplemented. Throughout the same period, the diffusion of new technologies systematically appears to be favourable to higher and intermediate level occupations. Technological change contributes less to a polarisation between higher level and lower level jobs than to the emergence of a society where intermediate level jobs take an increasingly central place. However, the joint rise in higher and intermediate level jobs is not strong enough to absorb the influx of high school and college graduates. An increasing number of graduates are forced to compete with less educated workers in lower level job positions. The result is both an increase in the occupational downgrading of graduates and the persistence of very high unemployment rates for non graduates.

Do labor tax rebates facilitate firm growth? An empirical study on French establishments in the manufacturing industry, 2004–2011

In order to reduce labor costs and stimulate job creation, many governments implement a large set of devices mainly consisting in reduced rates of social contributions. The evaluation of their effect is still controversial. Unlike previous research, our purpose is to appraise to what extent firm growth reacts to a decrease in the cost of labor per employee. We tackle this question using an unbalanced panel of French establishments operating in the manufacturing industry between 2004 and 2011. We run estimations using a 2-STEP estimator making it possible to estimate the impact of explanatory variables on job creation at any point of the distribution of establishments’ employment growth rate, while also controlling for individual fixed-effects component. Our results show that the effect of the decrease in the labor cost generated by tax rebates mainly benefits fast growing and large establishments. Indeed, the change in the number of employees in other establishments is significantly less affected, even though the effect remains positive, by the reduction in social contributions. This is particularly the case for smaller establishments as well as for those whose growth is stagnant or negative. These results lead us to reconsider the relevance of large-scale policies aiming at reducing labor costs in the same way for all establishments, regardless of their size or financial health.

Taxation of labour: the effect of labour taxes and costs on employment in Macedonia

The objective of this article is to investigate the effect of tax and social contributions reforms on employment in Macedonia, through estimating a labour demand function over the period 1998:Q1–2010:Q3. The results are used to establish a foundation for an evidence-based policy for increasing employment in a country with high unemployment, while recognising the reality of budget constraints. The article disaggregates the total tax wedge into an income tax wedge and a social contributions wedge, in order to test the argument that the main burden on labour in transition economies stems from social contributions and not from income taxation, mainly due to the dominance of unskilled jobs in those countries. We also impose a control for the introduction of the gross wage concept in 2009, which is said to have had the effect of reducing the informal economy. We find that the reduction of social contributions has a significant effect on employment in Macedonia, ranging from 0.9 to 3.1 percentage points. The effect of the income tax wedge is found to be insignificant. Moreover, the estimates relating to the gross wage concept and the associated measures provide some evidence for the view that the reform generated a transfer from the informal economy into formal employment, thus most probably shrinking the grey economy in the country.

Quinze ans de politique de l'emploi

Since 1974, the government has been facing bad employment crisis and an unprecedent aggravation of unemployment. The response to this situation has been the implementation of active policies for employment creation and for limiting the increase of the labor force. This is what, in the last ten years, has been conventionally called «employment policy». Until recently, it has been difficult to quantify the effect of the employment policy because synthetic data were not available. The purpose of this article is to fill this gap by evaluating, for the first time, the number and the type of receipients of employment poleies in the last fifteen years. This allow us to evaluate the effect of these policies on unemployment and other macroeconomic indicators. Our results show that, in the middle of the employment crisis, the use of employment policies has allowed several hundreds of thousands of people to avoid unemployment. However, macroeconomic mechanisms have tended to decrease the «returns» of the system of «social management» of unemployment .The claim of our paper is that in the worst moments of the employment crisis, the alternative policy of stimulation of employment through decrease of labor costs (obtained, for example, through reduction of social contributions) would not have been as effective as direct social management of unemployment. On the other hand, we suggest that in the high growth situation of recent years, employment policy should move in that direction.