News to France

Incentives influence behavior:

PARIS, Jan 31, 2006 (AFP) - The number of people unemployed in France fell sharply in December, and by 5.2 percent in the whole of 2005 cutting the unemployment rate from 10 percent to 9.5 percent, official data showed on Tuesday.

In December alone, the number of people unemployed fell by 19,300, a reduction of 0.8 percent from the December figure and, more remarkable, for the ninth month in a row.

And what might have been responsible for the drop:

Early last year, the government took the highly controversial route of relaxing complex legislation to protect people in work.

The aim was to encourage small businesses to employ people temporarily without being bound to employ them permanently, and to help the young unemployed to find work for up to two years.

At the beginning of 2005, the number of people registered as unemployed had risen to 10.2 percent in March. The trend changed modestly in April and then decisively.