The students are winning the political battle against Dominique de Villepin, the French prime minister, over his labour contract for young people, known as CPE. At first sight, the travails of Mr de Villepin fit a depressing pattern of Europe's chronic inability to reform. The prime minister is portrayed in the media as an idealistic political leader who tried to do the right thing, but failed. In the same vein, the young protesters on the streets of Paris look as though they stand in the way of France's transition to the 21st century.
This narrative is as widespread as it is false. As far as I know there exists no reputable academic foundation for Mr de Villepin's specific proposal – a work contract that removes employment protection for the young, while leaving it fully in place for the old. There is some consensus in the labour market literature that excessive employment protection can lead to high unemployment among certain groups, including the young. But this consensus does not imply the selective removal of employment protection for a single age group. I would suspect that most labour market economists would be on the side of the students in this conflict.
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