18 months to find a job, is that enough?

Olivier Véran, spokesperson for the government, considers the new duration of unemployment compensation to be adapted to the job market. What do economists say?

By Kevin Badeau

Oliver Veran, the government spokesman, here at the Elysee Palace before a cabinet meeting last July.
Oliver Véran, the government spokesperson, here at the Élysée Palace before a council of ministers last July.
© Arthur Nicholas Orchard/Hans Lucas via AFP

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Ua little sentence that makes a lot of talk. “In the period we are experiencing, eighteen months to find a job is enough,” government spokesman Olivier Véran said on Tuesday about the tightening of the conditions for granting unemployment insurance. . For the record, the executive announced at the beginning of the week a 25% reduction in the duration of compensation – from 24 to 18 months, therefore – for all job seekers opening rights from 1is February 2023.

Eighteen months, is it really enough? The question is debated. The workers’ unions, in any case, considered this decision “unacceptable”. Some elected officials from La France insoumise (LFI) and the Rassemblement national (RN), who are so quick to challenge the existence of any ideological link between their camps, have also expressed their strong opposition, calling the measure “a social humiliation” (Paul Vannier, LFI deputy) or “misleading” (Jean-Philippe Tanguy, RN deputy).

READ ALSOUnemployment insurance: the duration of compensation reduced by 25%

incentive to work

From the point of view of the economists questioned, this reform is far from being perceived as scandalous. “Given the current state of the job market, eighteen months is not an unreasonable period,” said Olivier Redoulès, director of studies at the Rexecode economic institute. In recent times, it is not the offers that are lacking in France. Pôle emploi currently compiles 977,000, if we are to believe the counter displayed on the home page of its website. Worse, in the third quarter, 373,100 positions remained vacant, according to Dares, a figure up 3% compared to the previous quarter. The labor shortages affecting certain sectors of activity (catering, building metallurgy, etc.), while France has an unemployment rate of 7.3% (excluding Mayotte), add grist to the mill of the government.

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READ ALSODo the French work enough?

In this context, the government wants to encourage the unemployed to find their way back to work more quickly, in addition to saving 3 to 4 billion per year and getting closer to full employment, the promise of candidate Macron. “The economic literature highlights the incentive effect of the reduction in the duration of unemployment benefit on the resumption of activity”, confirms Olivier Redoulès. The economist and president of the Institut Sapiens think tank, Olivier Babeau, illustrates this as follows: “Some people, able to quickly find a job, prefer to remain unemployed for reasons of comfort. For these people, the transition to eighteen months may encourage them to resume activity more quickly than they would have liked. »

Generous system

If it will be difficult for the government to convince the slayers of the merits of this new slider, two elements could however reassure them. The first concerns the average seniority of the return-to-work assistance allowance communicated by DARES. In 2018, this average was eighteen months, which coincides – surprise! – with the new maximum duration of compensation defended bluntly by Olivier Véran. Why 2018 as a point of comparison, and not another? “The macroeconomic context was close to that which we know today. As in 2018, we are approaching a turnaround. As in 2018, companies are expressing recruitment difficulties that are hampering their growth,” explains Olivier Redoulès.

The second element concerns the generosity of the French model. “Despite the passage from 24 to 18 months of compensation, our system does not have to be ashamed of the international comparison”, assures Olivier Babeau. “We would be closer to the average”, nuance Olivier Redoulès. Overview of unemployment insurance systems in Europe, published in January by Unédic, highlights the high level of protection of the French safety net with regard to fifteen countries, including Germany, Switzerland and Portugal. A net that is all the more reassuring – and flexible – since the duration of the allowances would increase to twenty-four months if unemployment crossed the 9% mark or increased by 0.8 percentage point over a quarter.

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