The impact of unemployment insurance on employment norms and income levels: the inevitable drift into 'reduced activity'

Abstract

The aim of this article is to analyse a specific set of support instruments for the unemployed, namely those introduced in 1986 by the bipartite French unemployment insurance fund (UNEDIC) for those in casual employment. Under the new scheme, unemployed people were able to combine a limited income from casual employment with a part of their unemployment benefit, for a period of up to 18 months. Based on the dubious assumption that even precarious employment is better than full-time unemployment, this opportunity was designed to induce the unemployed to take up employment of any kind. The article considers in detail the economic and social context prevailing prior to the introduction of these measures, concluding that precarious, casual employment far from serves as a springboard to permanent employment, but that, on the contrary, it may lead an increasing number of people into underemployment and low-pay traps.