Single Mothers and Incentives to Work: The French Experience

Abstract

This paper analyzes the effect of the 1998 reform of the French single parents allowance on the labor supply of single mothers with very young children. The reform aimed at encouraging participation by allowing eligible single parents to accumulate benefits and labor earnings for a limited period of time. Using data from the French Employment Survey, the analysis shows that single mothers affected by the reform had experienced a significant increase in their employment rate four years after the reform was implemented. During the same period, the employment rate of married mothers with young children did not experience a significant change, suggesting that at least part of the increase was a consequence of the reform. These results provide some evidence that benefit schedules that provide financial incentives to work can have significant effects in getting single moms back to work, even in the presence of very young children.