Reform of the reference daily wage and career progression / professional trajectories

Fontaine, François; Rousseaux, Pierre; Tô, Maxime

Home » Publications » Report » Reform of the reference daily wage and career progression / professional trajectories

Reform of the reference daily wage and career progression / professional trajectories

François Fontaine, Pierre Rousseaux, Maxime Tô

April 2025

Cette étude effectue l’évaluation des effets de la réforme du salaire journalier de référence, qui est entrée en vigueur le 1er octobre 2021 dans le cadre d’une refonte globale de l’Assurance chômage en France.

Reference IPP Report No. 55

Quote this publication

Fontaine, François, Rousseaux, Pierre, Tô, Maxime (2025). ‘Reform of the reference daily wage and career progression / professional trajectories’, IPP Reports, No. 55. Institut des politiques publiques (IPP).

Download

Presentation

The reform of the reference daily wage came into force on 1 October 2021 as part of a comprehensive overhaul of the unemployment insurance system in France. For jobseekers who have alternated between periods of employment and unemployment before becoming eligible for benefits, this reform extends the maximum duration of unemployment benefits whilst reducing the amount paid.

This study evaluates the impact of this reform on career progression / professional trajectories, taking into account the varying extent to which individuals are affected by the reform. This depends directly on the length of time spent unemployed between the first and last day worked over the past two years.

Key Results

The results indicate a reduction in unemployment benefits and an increase in the potential duration of benefit entitlement for individuals with the most fragmented employment histories. These changes are accompanied by a decline in the uptake of benefits and an increase in employment within six months of losing work. The effects are mainly evident between January and June 2022; the methodology used does not allow conclusions to be drawn regarding the existence of longer-term effects.

A reduction in benefit payments but an extension of benefit periods: the reform reduces the daily benefit rate by between 0 and 10 per cent whilst extending the potential duration of benefits by up to 75 per cent, depending on individual profiles.
An increase in employment and a decline in benefit take-up: there is an increase in the number of days worked (+5 to +20 per cent) for individuals with the most fragmented employment histories, with an employment-benefit elasticity of
-0.5 to -0.9 per cent. Furthermore, there is a reduction in the take-up of unemployment benefit
of around 2 percentage points.
A greater impact for those most at risk: the impact increases in line with the proportion of periods between contracts within the reference period, with effects concentrated on groups with more than 50 per cent of their time spent between contracts.
No effect detected on job stability: despite the aim of encouraging more continuous career progression, no impact was detected on the type of contracts obtained (fixed-term or permanent), their duration, wages or career transitions.
A fall in income whilst unemployed without a shift towards social security benefits: the reform did not lead to a significant shift towards the RSA (Revenue de Solidarité Active), thus limiting its impact solely to unemployment insurance expenditure.
Furthermore, for unemployment benefit recipients, the reduction in benefits, combined with a faster return to work, results in a reduction in the benefits paid of up to 1,000 euros over a six-month period.

Read the report summary

Read the report

Method and Data

The authors estimate the causal effects of the reform on employment trajectories using a difference-in-differences method, based on administrative data tracking patterns of employment, unemployment and non-employment (the MiDAS panel from Dares).

Their level of observation is the end of a contract. Each end of contract is associated with a series of indicators relating to the individual’s trajectory following that end of contract: recourse to unemployment benefit, any amount of benefits received, the number of days worked by the individual during the 6 and 12 months following the end of their contract, the type of jobs taken up, the number of contracts taken up, the number of days per contract, etc. The authors compare changes in these indicators according to the contract end date, across different groups defined by the length of the gap between contracts during the period used to calculate the SJR.

To take one example, the number of days worked is compared for contract end dates before and after 1 October 2021. It is concluded that the reform has a positive effect on employment if the increase is greater (or if the decrease is smaller) for individuals with long periods between contracts, compared with those with short periods. This allows us to account for general labour market trends, both before and after the reform, and for systematic differences between groups with different lengths of time between contracts, whilst using differences in exposure to the reform to measure its effects.

This method nevertheless assumes that the effects of seasonality on the labour market are similar across the different groups with varying lengths of time between contracts. Our results suggest that this assumption is plausible, provided that we compare indicators relating to cumulative employment over a period of at least six months following the end of the contract across these groups.

Partners

This study was carried out as part of the work of the Evaluation Committee for the Unemployment Insurance Reform launched in 2019, and received funding from the Directorate for Research Coordination, Studies and Statistics (DARES) as part of the call for research projects entitled ‘Quantitative monitoring of the effects of the unemployment insurance reform on jobseekers’.