Hiring bonus in small and medium-sized enterprises: initial evaluation based on hiring declarations

Assistance with hiring for small and medium-sized enterprises (SMEs) with less than 250 employees was introduced at the end of January 2016. This assistance consisted in paying these enterprises a bonus for each new hiring on an open-ended contract (CDI) or a fixed-term contract (CDD) of at least six months and where the wage was no more than 1.3 times the minimum wage. This measure is in line with policies to reduce the cost of work at around the minimum wage level; it differs, however as it targets SMEs and favours stable jobs over short contracts.

In H1 2016, 54% of fixed-term contracts of at least 6 months and 34% of open-ended contracts in enterprises with less than 250 employees took advantage of the bonus. In enterprises with less than 10 employees, this rate reached 77% for fixed-term contracts of 6 months or more. The hiring bonus does not seem to have had an easily interpretable effect on open-ended contract hirings. However, in H1 2016, the increase in hirings with fixed-term contracts of at least 6 months was greater in enterprises with less than 250 employees (eligible for the bonus) than in the larger ones.

However, this comparison is based on enterprises that are very unequal in size, and whose behaviour may diverge for reasons other than the hiring bonus. These factors can be cancelled out by looking only at enterprises situated on either side of the 250-employee threshold. The change in hiring shows a discontinuity, but one which is not significant at the 95% threshold: it would therefore appear that the bonus did not increase hiring in these enterprises.

This result does not rule out the possibility that the bonus may have had a positive impact on hiring in small enterprises that are further from the eligibility threshold, and on employment in all the enterprises concerned by the measure. With the data currently available, however, such effects cannot be evaluated.