The Influence of Earned Income Credits on Female Employment in France: An Estimate Using the INES Model

Fugazza, Marco

The Influence of Earned Income Credits on Female Employment in France: An Estimate Using the INES Model - 2003.


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The sensitivity of the female labour market in France to the prime pour l’emploi (earned income tax credit) is estimated using a structural model. The supply of female labour is discrete and maximises the utility of households with restricted budgets, taking into account women’s chances of finding work. Households’available income for each set of working hours is estimated using the Ines microsimulation model, which assigns scaled statutory tax and benefit transfers to the households in the Insee Taxable Income Survey. The elasticity of labour supply to earned income is estimated to be 0.3 for single women and 0.8 for women with partners, and the prime pour l’emploi has relatively little impact.

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