6th European Conference on PHS

WLB and PHS: what are the impacts of recession and austerity

The cost-effectiveness of PHS policy : A theoretical framework

Jean-François LEBRUN

Project Director, Directorate-General of the Treasury, Ministry of Finance, France

Advisor, Employment policy, European Commission

€

Hours

Total gross cost

There are two main elements:- The social policy component- The employment policy component

€

Hours

Deadweight effect = fixed cost

Withourt public support:30% of formal jobs / 70% of undeclared jobsIf today, we have puiblic support then70% of formal jobs / 30% of undeclared jobs

30% = +/- 40% of 70%

€

Hours

Total net cost (all policies)

= Gross cost – gross revenue

Or

Gross cost – gross direct feedback

€

Hours

Indirect feedback

€

HoursNet cost of Employment policy

% support = % tax wedge>

<

Net cost of social policy

€

Hours

Total real net cost

€

Hours

Total real net cost

€

Hours

Total Gross cost

€ / job€

Hours

Net cost by job created

My preliminary conclusions:

- The gross cost of PHS policies is high

- The real net cost of PHS policies is strongly reduced by the feedbacks

- The feedbacks are dependent of assumptions

- The net cost of employment policy is close to zero if the rate of intervention is

close to the rate of tax wedge

- The net cost of social policy dependent of the level of solidarity chosen by the population

- The cost by job created in this sector seems less expensive in comparison with other policies

- There are important needs especially in line with the work life balance and the elderly care

- Other aspects must be taken on board: quality, education, skills, career, recruitment,

new technologies, informal carers,…

Thank you for your attention