Économie et Statistique n° 467-468 Measuring saver preferences - Introduction and three papers about the "Active solidarity income" (RSA) - How does the taxable income of households react to taxation?

Economie et Statistique
Paru le : 24/04/2014
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Do the RMI and its successor the RSA discourage some young people from working? An analysis of young people aged around 25

Olivier Bargain et Augustin Vicard

In France, only people without a dependent child and aged 25 and over may be beneficiaries of the active solidarity income (RSA). Before the introduction of this scheme in June 2009, the same condition existed for the minimum income allowance (RMI), with the idea that the ability to receive a minimum income could discourage some young people from seeking employment or continuing their studies. This article seeks to assess whether the RMI and following this, the RSA discourages some young people from working. In this case, we would observe a decline in the rate of employment of young people just after the age of 25, as some would choose not to work or would reduce their job-seeking effort from this age. Unless there are measures encouraging job applications for those aged under 25, a decline in the employment rate at 25 years could be attributed to the effects of the RMI and RSA on the financial incentive to work. To investigate this question, we conduct a discontinuity analysis on the annual census surveys from 2004 to 2011, allowing accurate estimators to be obtained for employment rates by age for young childless single people with few qualifications. We do not observe a break in employment rates at age 25 for all young people without children, indicating that the RMI and RSA have no marked disincentive effect on the employment of young people around this age. However, a slight break in employment rates is visible for the least qualified young people (who at best have the BEPC certificate) in the early years of the study (women over the period 2004-2007 and men over the period 2004-2005), but it disappears thereafter, especially after the introduction of the RSA. As the disincentives to work for young people without children are already low with the RMI, confined to young people without qualifications, there is no call to expect a re-incentive effect from the RSA, with conclusions limited to the target group of our study.

Economie et Statistique
No 467-468
Paru le : 24/04/2014