The Politics of Temporary Work Deregulation in Europe: Solving the French Puzzle

Abstract

Temporary work has expanded in the last three decades with adverse implications for inequalities. Because temporary workers are a constituency that is unlikely to impose political costs, governments often choose to reduce temporary work regulations. While most European countries have indeed implemented such reforms, France went in the opposite direction, despite having both rigid labor markets and high unemployment. My argument to solve this puzzle is that where replaceability is high, workers in permanent and temporary contracts have overlapping interests, and governments choose to regulate temporary work to protect permanent workers. In turn, replaceability is higher where permanent workers’ skills are general and wage coordination is low. Logistic regression analysis of the determinants of replaceability – and how this affects governments’ reforms of temporary work regulations – supports my argument. Process tracing of French reforms also confirm that the left has tightened temporary work regulations to compensate for the high replaceability.

Keywords: insider-outsider, temporary work, employment protection legislation, replaceability, labor market reform

JEL Classification: J5, J49, P16, J58