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Tax cuts or social investment? Evaluating the opportunity cost of French employment strategy.

Authors :
Carbonnier, Clément
Palier, Bruno
Zemmour, Michaël
Source :
Cambridge Journal of Economics; Nov2016, Vol. 40 Issue 6, p1687-1705, 19p, 2 Charts, 1 Graph
Publication Year :
2016

Abstract

Tax expenditures are widely used by French governments as employment and social policies. Such programmes together amounted to more than 1.3 points of GDP in 2011. Thanks to a systematic review of academic policy evaluations, we assess the efficiency of the different parts of such policies, showing that at least €6 billion is used for policies whose cost is greater than €62,500 per year and job created, and €0.5 billion for policies whose cost is greater than €160,000 per year and job created. We examine the replacement of these tax expenditures by direct public funding for (publicly or privately delivered) "quality" jobs addressing specific social needs. We discuss the conditions under which at least comparable employment performances could be achieved (factoring in the crowding out of privately funded jobs and the properties of created jobs in terms of the service provided or the characteristics of suppliers and consumers) as well as any positive economic and social externalities. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
0309166X
Volume :
40
Issue :
6
Database :
Complementary Index
Journal :
Cambridge Journal of Economics
Publication Type :
Academic Journal
Accession number :
119347853
Full Text :
https://doi.org/10.1093/cje/bev080