Who wants the Contrat de Travail Unique? Social Support for Labor Market Flexibilization in France

• Date: 01 October 2014
• DOI: http://doi.org/10.1111/irel.12070
• Author: Bruno Amable
• Published date: 01 October 2014

Who wants the Contrat de Travail Unique?

Social Support for Labor Market Flexibilization

in France

*

BRUNO AMABLE

In France, a proposal was made to substitute a unique labor contract with a

degree of employment protection increasing with tenure to the existing open-end

and fixed-term contracts. Using survey data, this paper analyzes the social support

for this contrat de travail unique (CTU). Contrary to the prediction of insider/out-

sider theories, support for the CTU comes from insider groups, whereas most out-

sider groups oppose it. This result may be the consequence of the job protection

increasing with tenure. This mechanism could reinforce certain types of market

segmentation instead of abolishing employment precariousness.

Introduction

SINCE AT LEAST THE BEGINNING OF THE 1990S,HIGH AND PERSISTENT UNEMPLOY-

MENT in Europe commonly has been blamed on rigid labor market institutions

(Bean 1994; Siebert 1997). Although contested (Amable and Mayhew 2011;

Amable et al. 2011; Baker et al. 2005; Howell 2011; Howell et al. 2007), this

view has become prominent in the recommendations for labor market reform

made by international organizations: The Organisation for Economic Co-opera-

tion and Development (OECD) in its original jobs strategy (1994) as well as

its reassessment (2006), the International Monetary Fund (IMF) (2003), or the

European Commission (1997, 2013).

Employment protection legislation (EPL) is also blamed for fuelling dualism

on the labor market (Boeri 2011; Saint-Paul 1996). In France and in other

European countries, past attempts to increase labor market flexibility have been

made “at the margins,”extending the possibility for employers to use atypical

contracts rather than changing the level of protection of the core employees

*The author’saffiliation is Paris School of Economics - University of Paris I Panth

eon Sorbonne, CEPRE-

MAP and Institut Universitaire de France, Paris, France. Email: bruno.amable@univ-paris1.fr.

This work was supported by the French National Research Agency, through the program Investissements

d’Avenir, ANR-10–LABX_93-01 and the project “In

egalit

es durables, protection sociale et redistribution,”

ANR-11-INEG-0001.

INDUSTRIAL RELATIONS, Vol. 53, No. 4 (October 2014). ©2014 Regents of the University of California

Published by Wiley Periodicals, Inc., 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington

Road, Oxford, OX4 2DQ, UK.

636

under open-ended contracts (Blanchard and Landier 2002). This would explain

the rise of nonstandard forms of employment (Blanchard and Tirole 2003a),

temporary employment or part-time work, as well as the high level of unem-

ployment among young people. In France, this strategy has been challenged

by some economists who proposed to simplify labor market regulation and

substitute a single open-ended employment contract, with protection increasing

with tenure, to both fixed-term and open-ended contracts (Blanchard and

Tirole 2003a, 2003b; Cahuc and Kramarz 2004) in order to eliminate the

insider–outsider divide: the contrat de travail unique (hereafter CTU).

In general, permanent workers, whose employment security could be

decreased, are expected to oppose such a proposition while outsiders, whose situ-

ation in the labor market would improve, are likely to back the CTU (Bentolila,

Dolado, and Jimeno 2012; Saint-Paul 2000). The aim of this article is to analyze

the social support for the CTU. A question on the implementation of the CTU

was included in the 2012 French post-electoral survey (Sauger 2012).

1

This pro-

vides a rare opportunity to test hypotheses regarding the social support of labor

market liberalization with regard to a concrete, actual reform proposal, rather

than with regard to relatively abstract survey questions on general opinions.

The article is organized as follows. The next section presents the issues con-

cerning the labor market in France and the proposition of a single employment

contract. The following section reviews the political economy of the single

employment contract and assesses the potential support for such a reform.

Next I describe the empirical strategy adopted, followed by a discussion of the

first series of results, which check for correlations between different dimen-

sions of social stratification and the support for the CTU. The last sections

consider extended models and robustness tests and provide a conclusion.

The French Labor Market and the Proposition of a Single Employment

Contract

The existence of two parallel labor markets (Doeringer and Piore 1971), one

in which workers have the protections of a permanent contract, and another in

which workers have contracts that leave them exposed to business-cycle–

related risks, is considered to be at the root of several economic inefficiencies:

An inefficient labor turnover because firms are reluctant to transform tempo-

rary contracts into open-ended contracts, an inefficient allocation of human

resources because opportunities offered to outsiders are limited by the posi-

1

See Appendix A1.

Social Support for a Unique Labor Contract / 637