Would a New Form of Employment Contract Provide Greater Security for French Workers?

The single contract, which is put forward as an alternative to the current dual system incorporating fixed-term and permanent labour contracts (CDD-CDI), is the focus of much attention among economists and was recently taken up by presidential candidate Nicolas Sarkozy (on the basis of a report carried out by Cahuc and Kramarz [2005]). A uniform labour contract would avoid the threshold effect1 on the cost of job protection in France, which has been the source of excessive job losses and a segmentation of the labour market into two groups: those who are protected under the permanent contract (CDI), on the one hand, and those who remain trapped in the precarious situation of facing either a series of fixed-term contracts (CDDs) or unemployment, on the other. This study2 focuses on the varying effects of the measures required to implement this single contract, according to the age of the workers concerned. One of the main findings is that significant job protection should be provided as soon as the trial period ends and applied in a uniform manner regardless of the employee's age or time spent with the employer.