On the design of self-financed Prime d’Activité reforms

figures of men and women, on piles of coins of different heights, with a rising statistical curve in the background

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The Institut des politiques publiques is today releasing an opensource test function for identifying the inefficiencies of a socio-fiscal system. This tool, developed by a European team including IPP researchers, can be used to identify the conditions under which reforms can be pareto-improved.

In this note, the researchers have applied the test function retrospectively to the 2019 prime d’activité reform, following the yellow vests movement.

They show that certain inefficiencies already existed before the 2019 reform: they are found around 23,000 and 28,000 euros gross annual salary. For the record, the reform of the prime d’activité increased the number of beneficiaries by 37%, as part of an overall plan worth 10 billion euros.
> Read the note

The IPP makes this tool available to public policy-makers and the academic community. The code is now available as opensource on IPP’s gitlab.
> Access the code

A first collaboration is underway in Germany, with the Ministry of Labour, as part of the coalition agreements to reform subsidies for low-income households

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