Policies·fr_cpe_withdrawn_2006

Contrat première embauche withdrawn

FRA·2006 – 2006·enacted 2006-04-10candidate

What the policy did

Contrat première embauche (CPE) under Loi 2006-396 of 31 March 2006 created a first-employment contract for under-26s in firms with 20+ employees featuring a two-year "consolidation period" during which dismissal without cause was permitted. Triggered nationwide protests March-April 2006 (1-3 million demonstrators at peaks). Chirac promulgated the law but announced 10 April 2006 that its key CPE article would be replaced — effectively withdrawn. Substituted with a youth-employment aid scheme.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

unintended / side-effect

—

labour market flexibility

regulatory.labour_market_flexibility

Ease of hiring/firing, collective-bargaining scope, minimum wage rigidity, temporary/permanent contract regulation.

unchanged · weak · unintended

Enacted then withdrawn; no net change to labour-market protection.

Enacted by

france_chirac_ii_presidency_2002_2007

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Countries with stricter employment protection legislation — measured by the OECD EPL indicator (or comparable alternatives where OECD EPL is missing) — experience longer average unemployment duration, holding other controls constant.

labour_market_flexibility_unemployment_durationinferred

viaregulatory.labour_market_flexibility

INCONCLUSIVE_DATA_PENDING — interaction term requested but no loadable constructed interaction variable is defined. The generic panel_fe runner would otherwise …

run pending

In a broad-country panel 1990-2019, greater labour-market flexibility — measured by lower OECD EPL overall strictness, higher ease-of-hiring scores, and absence of centralized wage bargaining — predicts higher employment-to- population ratios and faster real GDP per capita growth, controlling for institutional quality, education, and trade openness.

labour_market_flexibility_employment_growth_panelinferred

viaregulatory.labour_market_flexibility

PARTIAL — coef=-1.251, p=0.162 (above α=0.1); direction inconclusive

partial

Germany's Agenda 2010 labour-market reforms worked within the Ordoliberal framework precisely because they preserved collective-bargaining institutions and vocational-training architecture; the same reforms imposed on UK-style labour markets produced larger inequality increases.

labour_market_reform_institutional_complementarityinferred

viaregulatory.labour_market_flexibility

PARTIAL — coef=-7.366e+04, p=0.927 (above α=0.1); direction inconclusive

partial

Strong employment-protection legislation (EPL) with high union wage-setting coverage and limited at-will dismissal produces a three-order causal chain in Southern European labour markets.

strong_union_labour_law_youth_unemployment_south_europeinferred

viaregulatory.labour_market_flexibility

PARTIAL — coef=+2.943, p=0.252 (above α=0.05); direction inconclusive

partial

Labour-market flexibility (ease of hiring and firing, low EPL, decentralised wage bargaining) improves long-run employment rates, productivity growth, and GDP per capita only when paired with complementary adjustment institutions: active labour-market policy (retraining, job search assistance), relocation support, or income-smoothing mechanisms (unemployment insurance, portable benefits).

labour_flexibility_security_complementinferred

viaregulatory.labour_market_flexibility

PARTIAL — coef=+1.306e-16, p=0.339; effect magnitude effectively zero

partial

Labour-market flexibilisation reforms improve unemployment outcomes in countries with strong active-labour-market-policy (ALMP) complementarities (Denmark flexicurity post-1994, Germany Agenda 2010 / Hartz I-IV 2003-2005) but produce inequality increases without commensurate employment gains in countries lacking institutional ALMP infrastructure.

labour_market_reform_almp_complementarity_effectinferred

viaregulatory.labour_market_flexibility

SUPPORTED — coef=-5.815 (sign matches claim -), p=8.21e-05

supported

Median UK real wage growth since 2008 has been materially below the pre-2008 trend (approximately flat real median wages vs a 2% annualised pre-crisis path), producing a ~15–20 percentage-point shortfall by 2023.

uk_real_wage_stagnation_2008_present_decompositioninferred

viaregulatory.labour_market_flexibility

INCONCLUSIVE_DATA_PENDING — insufficient observations after listwise deletion (12)

run pending

Countries with more flexible labour markets show faster employment recovery after recessions than countries with strict employment protection.

labour_market_flexibility_employment_resilienceinferred

viaregulatory.labour_market_flexibility

PARTIAL — coef=-5.758e-16, p=7.77e-06; effect magnitude effectively zero

partial

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

Tupo income-policy agreement 2005-2007

FIN·2004

match

0.6

labour market flexibility

France tournant de la rigueur (March 1983)

FRA·1983

match

0.5

labour market flexibility

Italy Berlusconi I pension-reform attempt 1994 (withdrawn)

ITA·1994