Another unemployment insurance reform is being prepared, as Gabriel Attal confirmed this Wednesday. It could be effective next fall. The government’s objective is to restart a cycle of decline in the number of unemployed in France to achieve full employment and improve tax revenues, while public accounts have seriously fallen in 2023.
Since the emergence of mass unemployment in France in the early 1980s, unemployment insurance reforms have followed one another. With the same desire to tighten the conditions (amount, duration of compensation, etc.).
At first it was mainly a matter of balancing Unedic’s accounts, which showed a large deficit with the explosion in the number of beneficiaries of the subsidy (from 400,000 in 1973 to 1.8 million in 1982). This is the objective of the reforms of 1982, 1992 and even 1999. Thus, between 1979 and 2001, the maximum duration of compensation for an unemployed person under 50 years of age went from 36 months to 23 months.
But although Unedic’s accounts have been in the green since 2022 and should remain that way at least until 2025 according to the organization, the reforms of recent years point to a completely different objective. That of achieving full employment or at least very significantly improving the rate of people who have jobs (68% to date) and which remains well below the European average. A higher employment rate means more tax revenue for the State, but also better purchasing power for employees who are in a strong position to negotiate better salaries.
Employees are not always aware
For successive “Macron governments”, the overly generous compensation system in France would not encourage people to return to work. Hence the 2019 reform (which came into force in 2021) that made access to unemployment benefits difficult. To be entitled to compensation, a beneficiary must now have 6 months of work in the last 24 months, whereas previously 4 months out of 28 were enough to obtain compensation. But at the same time, the minimum duration of compensation has increased from 4 to 6 months to respect the principle established in 2009 of “one day contributed, one day paid.”
Has this reform borne fruit? According to a provisional report from the Dares evaluation committee, the number of rights granted decreased by 14% between 2019 and 2022 (falling on average each month from 204,000 to 175,000). The unemployment rate increased from 8.1 to 7.2% of the active population according to INSEE.
However, the report states that it is not able to distinguish the effects of the reform from those of the improvement in the economic situation. It is not clear, according to the qualitative studies carried out by the authors, that behavior has changed after the reform. Many employees “take what France Travail finally offers them, without always understanding its characteristics,” he says.
New reform in 2023 with the establishment of the Canadian-style countercyclical system that distinguishes between favorable periods (duty reduction) and unfavorable periods (duty increase). It meant a reduction in the maximum duration of compensation, which went last year from 24 to 18 months for those under 53 years of age (from 30 to 22.5 months for people between 53 and 54 years of age and from 36 to 27 months for those over 55 years of age). A reform approved in a context in which labor shortages reached record levels in France.
Duration reduced by 100 days
What results from this latest twist? Did you encourage the unemployed to go back to work? There is no impact study for such a short period, but what we can already see is that unemployment has not decreased during that period. It even increased 0.4 points between the first quarters of 2023 and 2024. An increase that is undoubtedly attributable to the economic situation but that the reform has not stopped. As a reminder, the economic situation has been equally unfavorable among our neighbors but without an increase in unemployment.
A first balance sheet prepared by Unedic a year after the reform logically shows a significant reduction in the rights of the newly unemployed.
“The average duration of entitlement for participants at the end of June 2023 is 100 days less than for participants before February 2023, the report’s authors note. However, it is still too early to draw lessons in terms of duration actually compensated. In mid-2023 only 12% of beneficiaries were affected by the rules resulting from the 2023 reform.”
In other words, does this change from 24 to 18 months really encourage the unemployed to return to work more quickly? The government, which wants to shorten compensation deadlines again, seems to think so. In any case, France has one of the most protective unemployment insurance systems in Europe and has one of the worst employment outcomes.
Source: BFM TV
