The ineffectiveness of the recurrent use of partial activity.

Summary Partial activity, better known as partial unemployment, allows companies faced with temporary and exceptional circumstances to receive subsidies to reduce the number of hours worked by their employees by paying for the hours lost. Partial unemployment has both beneficial and adverse effects. During the Great Recession of 2008-2009, partial activity has been the subject of renewed interest in the fight against unemployment, particularly in France where it has undergone successive reforms. This note shows that the partial activity reforms carried out after the recession mainly benefited large companies that use it on a recurrent basis to cope with seasonal fluctuations in activity. This expansion of partial activity is inefficient, as it subsidizes periods of inactivity, which reduces total output. In this context, it would be desirable to introduce a bonus-malus system, in which companies would finance partial activity via a tax proportional to their contribution to the cost of this measure, the payment of which would be spread over several years.