Thursday, December 29, 2016

The uncertain effects of the bonus hiring in SMES – The World

The device has met a big success – the 1.1 million employers have asked benefit, but its impact on jobs created remains difficult to measure, according to a study by the Insee.

The bonus to hiring paid since mid-January, to small and medium-sized enterprises (SMES), she helped to create jobs ? It is possible, but nothing allows us to say with certainty. Here it is, in substance, the conclusion mi-figue mi raisin, which leads to the Insee, in a study published on Thursday 29 December. It casts a shadow over the government’s communication, very laudative about this measure.

The device in question has been put in place in the framework of a plan announced earlier this year by president François Hollande. It is to be paid each quarter 500 euros (maximum) over two years (at most) for any person who is employed, on the condition that his salary is less than or equal to 1.3 times the minimum wage.

Read also : further decline in unemployment in November

The aid has met a big success with approximately 1.1 million employers have welcomed the levy, according to the ministry of labour. About 54% of the recruitment on xed-term contracts of at least six months and 36 % of the number of permanent positions in the ” benefited “, according to the study of the Insee, which emphasizes that these ” rate of use “ are calculated on all contracts, including those that may not come in the device (the remuneration being greater than 1.3 times the minimum wage). In other words, the percentages would be higher if the number of premiums was reported only to contracts paid to the height of 1.3 times the minimum wage or less.


anyway, the enthusiasm was real, especially in very small enterprises (VSES) of less than ten people : 77 % of the hires made by them, in the form of xed-term contracts of at least six months, have benefited.

However, the impact of the premium proves to be uncertain. It ” does not seem to have had an effect easily interpretable on the [hiring] CDI “, writes the Insee. In contrast, the number of new CDD of at least six months has increased faster ” in companies with fewer than 250 employees (…) that in the largest [who are not eligible for the scheme]. Is there a cause and effect relationship ? Hard to say, meets the Insee, because the employers who were entitled to receive this financial boost ” were able to be sensitive to cyclical conditions are favourable “.

Insee has, therefore, attempted to identify a ” specific effect of the award ” focusing ” the companies that are close to the threshold of eligibility “, slightly below and slightly above 250 persons. It was concluded that there were discrepancies between eligible companies and companies that are not eligible, but they ” are too weak to be able to assign them to a specific effect of the award “. The measure, adds the study, ” perhaps ” impact ” on the employment in companies of smaller size, but it is difficult to say without extra assumptions “.

This finding will bolster the supporters of the thesis according to which the device creates a windfall effect, their argument of saying that companies who received the help would have, anyway, added to their numbers, even if the measure had not been taken.

other investigations conducted previously to reach results different from those of the Insee. In August, the Treasury department had issued a note saying that the bonus could, in fine contribute to create 60,000 additional jobs by 2016 (estimate made prior to the announcement of the extension of the device by François Hollande in June). The institute for economic research COE-Rexecode, leads to a result that is hardly far away (50 000 creations of the post). Difficult, in this context, to be a religion.


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