بررسی تاثیر اعتبار مالیاتی فرانسوی بر نرخ اشتغال زنان

This paper investigates the employment impact of a new tax-credit programme that was put in place in France in 2001. According to the theoretical labour supply model, tax credits will have a positive effect on individual labour market participation as they increase the rewards from work. However, tax credits may discourage married women's participation mainly due to income effects. We analyse the introduction of the French measure by adopting a non-experimental evaluation method. Various treatment and control groups are defined. The first specification adopted relies on the policy eligibility rules for the construction of the control and treatment groups. The others hinge, respectively, on marital status, for women in couple-households, and on the presence of children, for single women. We find evidence of a negative employment effect for married women, with a reduction of about three percentage points in the employment rate after the introduction of the policy. In particular, it seems to be the conditioning on total household resources that discourages married women's labour market participation. On the contrary, the employment impact of the measure is positive for cohabiting women and twice as large. The policy effect is very small and statistically not significant for single women. The net impact of the introduction of the tax credit on the total employment of women is very marginal, amounting to the creation of about two thousand new jobs.

The French tax credit, called the “Prime Pour l'Emploi”, that is the “work premium”, was launched by the Socialist government of Prime Minister Lionel Jospin in the Spring of 2001, and later amended by ensuing Conservative governments. According to fiscal administrative records (see for example, Barnau and Bescon, 2006), 8.7 million households received some tax credit in 2001, representing approximately 25% of French households. Total government expenditure on the tax credit amounted to 2.5 billion Euros and the average tax credit per household was 290 Euros per year, varying between a minimum of 30 Euros and a maximum of over 500 Euros.1 In Anglo-Saxon countries, tax credits cover a smaller proportion of the population but the payments involved are much larger.2 In the UK over the period we consider, about one million households were beneficiaries of the Working Family Tax Credit, with an average yearly expenditure of over 2500 Euros per household. In the USA, there were nearly 20 million recipients of the EITC, with an average expenditure of almost 700 Euros per household. According to the theoretical labour supply model, tax credits will have a positive effect on the participation decision of (unmarried) individuals as they increase the rewards from work. For individuals already working, the effect on hours is ambiguous and, in particular, it depends on the relevant portion of the credit schedule – individuals in the phase-in of the measure, where the tax credit payable increase with earnings, will be induced to increase their working hours, while individuals in the phase-out, where payments decrease with earnings, will have opposite incentives – and on the size of substitution and income effects.3For married persons, eligibility to the tax credit is conditional on total household income (as opposed to individual income). For primary earners, the effects of the tax credit will be the same as for unmarried persons. For secondary earners, often the wives, both the decision to participate and the hours worked will depend on the relevant portion of the credit schedule as well as on substitution and income effects. In particular, married women, who are most often the secondary earner in the household, may opt to reduce hours or not participate at all in the labour market in order to make their husband eligible for the credit and/or to maximize the amount of credit payable (Apps, 2007). The literature shows that secondary earners' labour supply is particularly sensitive to tax incentives (Triest, 1990 and Bourguignon and Magnac, 1990) and that tax credits discourage secondary earners' participation and hours Apps, 2007). The Earned Income Tax Credit (EITC) has been shown to increase work incentives for lone parents in the United States (see, for example, Meyer and Rosembaum, 2001) but to significantly reduce married women's participation rates and hours of work (Dickert et al., 1995, Ellwood, 2000, Eissa and Williamson Hoynes, 2004 and Eissa and Hoynes, 2004). Heim (2005) appeals to a structural model of married couples' labour supply to conclude that while participation effects are small, there are negative effects of the EITC on the hours of work of both husbands and wives. Here, we investigate the employment effects of the French measure for married and unmarried women. French women have been previously found to be more responsive than men to policy incentives in the French taxation literature (see, for example, Piketty, 1998 and Bourguignon and Magnac, 1990). To our knowledge, this is the first evaluation of the employment effects of the French tax credit using non-experimental methods. Previous micro-simulation studies, prior to the introduction of the policy, predicted a small positive employment effect for French women, amounting to at most a few thousand new jobs for women in the age range 25–49 according to the most reliable estimations (see Stancanelli and Sterdyniak, 2004, for a review of this literature). In our analysis, we distinguish women further by their marital status to disentangle the differential incentive effects for married and unmarried women. Cohabiting women faced similar tax-credit incentives to single women, as joint taxation and means-testing on total household income only applied to formally married women in France at the time covered by the analysis. Various treatment and control groups are defined. The first specification adopted relies on the policy eligibility rules for the construction of the control and the treatment groups. The others hinge, respectively, on marital status, for women in couple-households, and on the presence of children, for single women. We analyse the impact of the initial policy. We may a priori not expect to find particularly large effects of the French tax credit on employment, given the relatively small amounts of money at stake. Although “announcement” effects might magnify the economic effects of the policy (see for example, Blundell et al., 2004),4 it may take quite some time for individuals to learn about the new tax credit and to react to the policy.5 Therefore, we may not be able to capture here the full policy effects. Our estimation results suggest a negative employment effect for married women. In particular, it seems to be the conditioning on total household resources that discourages married women's labour market participation. The marginal effect of the policy is estimated to be roughly 3 percentage points for this group, suggesting the destruction of some 120 thousand jobs since the introduction of the tax credit. We find evidence of a positive employment effect for cohabiting women. This effect is twice as large, in absolute terms, as that for married women. The estimates of the impact of the tax credit are very small and not significant for single women. The net impact of the introduction of the tax credit on the total employment of women is very marginal, amounting to the creation of about two thousand new jobs. The structure of the paper is as follows. The next section describes the French tax credit, and the evaluation model is presented in Section 3. The data and the selection of the sample for analysis are described in Section 4. The results of estimation are presented in Section 5, and Section 6 concludes.

This paper provides a number of estimates of the impact of the French tax credit, “la Prime Pour l'Emploi”, on the employment rate of low-earnings women. This is to our knowledge the first evaluation study based on data posterior to programme implementation. It is also the first to apply non-experimental evaluation methods. Like similar in-work benefits programmes, the French tax credit was expected to increase work incentives for non-employed individuals. However, it may decrease incentives to work for (married) secondary earners, as found in the American EITC literature. Cohabiting women faced similar tax-credit incentives to single women, as joint taxation and means—testing on total household income only applied to formally married women in France at the time covered by the analysis. We estimate the impact on employment of the introduction of the policy in 2001. We may a priori not expect to find particularly large effects of the French tax credit on employment, given the relatively small amounts of money at stake. We test for employment effects of the policy on women by applying a standard non-experimental evaluation method, a “difference-in-differences” approach. Various treatment and control groups were defined. The first specification adopted relies on the policy eligibility rules for the construction of the control and the treatment groups. The others hinge, respectively, on marital status, for women in couple-households, and on the presence of children, for single women. The data used for the empirical analysis are drawn from the French Labour Force Surveys from 1999 to 2002. On the basis of the estimation results, we conclude in favour of a negative employment effect of the programme for married women, amounting to a reduction of roughly three percentage points in married women's employment following the introduction of the tax credit. In particular, it seems to be the conditioning on total household resources that discourages married women's labour market participation. The employment rate of cohabiting women, not subject to the means-testing on total household resources, instead increased by six to seven percentage points. The employment effects of the tax credit for single mothers were not statistically significant. This could partly reflect the poor specification of the control group, which is difficult to define as almost all lone parents turned out to be eligible for the tax credit. We conclude that the net impact of the introduction of the tax credit on total employment of women was very small, amounting to the creation of about two thousand new jobs.