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

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.
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Submitted on : Tuesday, November 20, 2012 - 9:53:10 AM
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Muriel Roger, Philippe Zamora. Hiring young, unskilled workers on subsidized open-ended contracts: a good integration programme?. Oxford Review of Economic Policy, Oxford University Press (OUP), 2011, 27 (2), pp.380-396. ⟨10.1093/oxrep/grr016⟩. ⟨halshs-00754538⟩

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