Insights from academic research on the labour market

In the first quarter of 2022, in France, the unemployment rate stood at 7.3% of the active population, compared to 8.1% at the end of 2020. In view of these figures, unemployment has more than withstood the health crisis caused by the Covid-19 pandemic. It has even returned to its pre-pandemic level. This remarkable and counterintuitive result — given the extent of the economic shock caused by health restrictions (lockdowns, closures of non-essential businesses) — is mainly due to the protective measures put in place massively by the public authorities, in the first place of which is short-time working, and this at the European level, which is a first.

With the resumption of the economy in 2021 — and hopefully its continuity in 2022, but this will depend in particular on the consequences of the war in Ukraine — tensions on the labor market have increased. For several months now, companies have been experiencing difficulties in recruiting in many sectors, in particular the hotel and restaurant industry, retail sales, personal services... If the specter of the Great Resignation, the phenomenon observed in the United States where millions of employees leave their jobs, is not on the agenda in
France, there are still reasons for concern and companies must therefore redouble their efforts to attract the best candidates or simply candidates.

This situation, which is all in all unusual, should not make us forget the structural shortcomings of the employment market: low integration of young people, a high proportion of young school dropouts without jobs or training, significant unemployment among seniors or even a lower participation rate in the labor market than in neighboring countries... To remedy this, the government aims to reform the labor market and reduce unemployment insurance spending in the coming months.. And time will tell if that works.

Until we know more about the outlines of future reform, academic research helps to inform public debate by analysing some existing public mechanisms. At the Louis Bachelier Institute, the Chair: Securing career paths produces excellent work on the labor market, in particular through modeling and experimentation.

This new issue of Cahiers Louis Bachelier is a new illustration of his contributions. In the first article, you will find a summary of work carried out on the consequences of lockdowns on the main macroeconomic aggregates. The second text analyzes the impacts of the increase in minimum wages on the dynamics of global wages, a subject that could not be more topical! The third article focuses on the reduced activity of the unemployed and the resulting costs for the unemployment insurance system. As for the fourth article, it concerns the consequences of the information provided to the unemployed on training.

Finally, the last text discusses a random experiment conducted with school dropouts to identify their motivations for contacting a local mission.

Happy reading!

Jean-Michel Beacco,

General delegate of the Louis Bachelier Institute (ILB)

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