Social security and job-creation measures: recent French experience.

This report examme and evaluates recent steps taken m France to ehmmate temporally the employers’ socml security payroll tax and to mtroduce Governmentsubsldlzed employment trammg programs tn an effort to open up Jobs for the unemployed Much attention has been gwen I” the Umted States and abroad to the problem of the sharp growth m the level of unemployment, parttcularly among those under age 25 Here and elsewhere, concern has also focused upon the Impact of soctal security payroll taxes on employment levels French employers who, dung July-December 1917, hwed blue-collar or whtte-collar workers under age 25 were granted a temporary exemptton from paymg then share of the soaal secwty payroll tax contrtbutton The exemptlon was appltcable from the date of employment through June 1978 The Government assumed responseblhty for makmg the contrtbuttons to the soaal secunty system on the employers’ behalf In addltlon, the Government pad monthly allowances m place of wages to workers under age 25, smgle women wth at least one child, or wdows partwpatmg tn a 6-8 month on-theJob trammg program that began m the last 6 months of 1977 As part of the July 1977 leglslatwe package-the Nattonal Pact for Employment-these features were deslgned to create Jobs by partially offsettmg the employers’ labor costs for the 475,000 young persons expected to enter the labor force the followmg fall Proponent8 had argued that high labor cost8 served to deter employers from hxmg young unskilled workers