The good deal of partial unemployment

Between fraud, windfall effect and star instrument of job protection, what is the true assessment of partial unemployment? Created in 1918, little used so far in times of crisis, the system has become, in France, with the pandemic one of the major levers of public policy to support employment. Since March 2020, 35.2 billion euros have come out of our coffers, including 11.5 billion euros taken from that of unemployment insurance, according to figures from Unédic. By way of comparison, in 2009, during the financial crisis, short-time working only cost 600 million euros, compared to 6 billion euros in Germany. A hexagonal choice which had resulted in a surge in the unemployment rate, from 7.8% to 9.4%, while that of Germany had remained almost stable. Learning the lesson of 2008-2009, France has therefore changed its system. So that, from March to December 2020, the employer was required to pay the employee, for each hour not worked, an indemnity representing 70% of the gross hourly wage. Then charge the State to finance all of the remuneration of non-working hours. What the government had done until May, within the limit of 4.5 Smic. During this period, more than one in seven employees was in partial activity. Then, the State’s commitment gradually decreased, reaching 60% in June 2020. In July 2021, with the exception of employees unable to work, the share paid to the employer was reduced to 36% of the gross salary and the compensation for the employee is only 60% of the gross salary (with a floor and a ceiling).

Layoffs avoided

If the cost of the device is important for public finances, few economic studies have looked into the subject. Still, they all converge on the protective effects of partial activity on short-term employment.

A study carried out by economists Julien Albertini, Anthony Terriau, Arthur Poirier and Xavier Fairise looks at the different methods of compensation for partial unemployment put in place by the State, during the year 2020: that before the crisis health, that put in place during the first confinement and that at 60% of gross wages. The first observation is that, if the government had not made the system more attractive, « the unemployment rate would have increased by nearly 5 percentage points on impact », against « an increase of around 1 to 2 percentage points”. In addition, add the authors, “it would probably have taken several years to return to the pre-crisis unemployment rate”.

In a previous study, the same had estimated that, without a device, the shock would have led to 10 percentage points of additional destruction, and 4 to 5 points by 2022.

Untargeted aid

The other finding is that there are significant windfall effects. “Some firms, in which employment was not threatened, used partial unemployment to adjust their working hours,” say the economists. To demonstrate this, economists tested the March 2020 scheme with the “slightly less generous” one. It emerges that “performance”, “in terms of the unemployment rate”, would have been identical, they conclude. With the difference that the hours not worked were much greater, and even excessive. Worse, “certain jobs which would have been maintained in the absence of partial unemployment have benefited from the program”.

This study therefore confirms the elements given by the monitoring committee. In his report, he underlined without giving details that “companies with an increase in turnover during the crisis” had benefited from the device. So that, « in some cases », the drop in their margins was « overcompensated ». According to the Court of Auditors, this would have happened for 8% of the beneficiary companies. As a reminder, during the first week, after simplifying the procedures, most requests were accepted automatically, without being inspected.

Other analyzes carried out during the economic crisis of 2008-2009 attempted to measure the windfall effect. According to Alexander Hijzen and Danielle Venn, the windfall effect would have been around 65% of the number of beneficiaries in France, while, according to Boeri and Brücker (2011), it would have been even stronger (90%) . Finally, according to Cahuc, Kramarz and Nevoux (2021), the system implemented in 2008 made it possible to safeguard employment, but presents a very heterogeneous cost-effectiveness ratio depending on the company, with many companies using it for security or opportunity. and not out of necessity, thus generating large windfall effects, lists and summarizes Unédic.

France in the European average

The government had insisted on being one of the most generous in terms of partial unemployment. Fake. According to Dares, which compared the measures taken during the health crisis by the various European countries, it turns out that in terms of coverage rate, it is the Netherlands which have been the most generous, followed by Italy and the United Kingdom (80%). With a rate of 70%, France is within the European average. On the other hand, it is in France and Luxembourg that the proportion of employees who have benefited from the scheme is the highest. Unfortunately, France does not stand out on the compensation paid to employees, with the exception of those paid the Smic, whose support is 100% of the remuneration. “With 925 euros spent per person, France occupies an intermediate position. It is nevertheless ahead of Germany, Sweden, Belgium and the countries of southern Europe, ”notes the statistical body, but far from Luxembourg with the 3,505 euros per person.


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