The ‘1 Young Person, 1 Solution’ scheme was launched in July 2020 as part of the France Relance recovery plan. It utilises various measures to offer a solution to every young person, through enhanced support for young people who are far from the labour market (such as additional funding for the Youth Guarantee), training or recruitment support to facilitate their entry into working life. In total, the ‘1 Young Person, 1 Solution’ scheme represents public expenditure of nearly 10 billion euros over the period 2020–2022, according to the Court of Auditors.
Evaluation of the ‘1 Young Person, 1 Solution’ Scheme
This report focuses on the impact of the one-off grant paid out as part of the ‘1 Young Person, 1 Solution’ scheme during its first year of implementation, between July and December 2020. The authors assess the impact of this state aid on the number of apprentices recruited and then demonstrate the impact that apprenticeships can have on students’ educational pathways by drawing on a reform that predated the ‘1 Young Person, 1 Solution’ scheme.
Reference IPP Report No. 51
Presentation
Key Results
Variable uptake of exceptional aid
On average, firms with fewer than 250 employees receive €5,960 per apprentice taken on, compared with €2,830 for those with more than 250 employees. However, there is considerable variation amongst the latter group: firms with more than 250 employees that are far from meeting the required targets for hiring under contracts for professional/vocational integration into employment make less frequent use of the exceptional grant than those that are already close to the target.
A sharp rise in apprentice hires
The introduction of the exceptional grant has coincided with a significant rise in the number of apprentices recruited compared with 2019: the number of apprentices recruited has increased by more than 40 per cent to reach 479,000. The proportion of apprentices recruited out of the total number of new hires in each firm has doubled: between 2016 and 2019, apprentice recruitment accounted for an average of 1.7 per cent of total new hires, compared with 3.3 per cent in 2020. This trend can also be measured by type of firm, based on their previous practices regarding apprentice recruitment. In 2020, three-quarters of apprentices were hired by firms that had already recruited at least one apprentice in previous years. Nevertheless, 2020 stood out due to a significant increase in the number of firms hiring an apprentice for the first time. Finally, it is worth noting that the rise in the number of apprentices hired observed in 2020 was mainly driven by apprentices studying for a qualification at a higher level than the baccalaureate.
The impact of the exceptional subsidy on apprentice hires
The authors show that firms receiving, on average, a higher level of state aid for hiring apprentices do indeed recruit a greater number of apprentices. In particular, firms with fewer than 250 employees receive a higher average amount of support than those with more than 250 employees, which must meet additional criteria to qualify for the exceptional support.
Consequently, firms just above the threshold of 250 full-time equivalent (FTE) employees hire 18 per cent fewer apprentices than firms just below this threshold. This difference is mainly driven by organisations that have not yet met their recruitment targets for contracts for (professional/vocational) integration into employment: they make less frequent use of the exceptional grant and therefore hire a smaller number of apprentices than comparable organisations that do not face these constraints.
The authors also show that the increase in apprentice hires has not been at the expense of similar profiles in the labour market: they find no substitution effect with regard to people on temporary contracts or work placements. Overall, the exceptional grant does indeed have a positive overall impact on the recruitment of apprentices. The authors estimate that 80,500 apprentice hires in 2020 can be attributed to the introduction of the exceptional support, representing 56 per cent of the increase in hiring observed between 2019 and 2020. However, this estimate should be treated with caution, as it is based on the assumption that the sample used for the estimate is representative of all firms benefiting from the exceptional support.
The impact of apprenticeships on the probability of discontinuing training
Over the period under consideration, the probability of undertaking a BTS via an apprenticeship rather than through school education increased significantly: it rose from 22 per cent in 2017 to 39 per cent in 2021. We show that this trend follows the liberalisation of the apprenticeship market in 2018, which reduced the average distance to the nearest CFA for students. The empirical methodology employed then shows that, for BTS students, undertaking the course via an apprenticeship rather than through school reduces the probability of dropping out at the end of the first year by 19 per cent in the year following the reform’s implementation.
The authors also analyse this impact for CAP students; however, the results are difficult to interpret as the reduction in the distance to the nearest CFA is less significant. They only observe the impact of the reform one year after its implementation: access to more recent data is likely to refine these initial findings.
Method and Data
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