Competitiveness and Employment Tax Credit (CICE), which came into force on 1st January 2013, significantly reduced the cost of labour paid below 2.5 times the minimum wage (Smic). This drop in the cost of one of a company’s production factors - labour – can be passed on to client companies through price reductions. The variation in cost induced by the CICE can differ widely from one sector to another: in the administrative and support service sector, labour costs for employees eligible for tax credit amounts to 38% of total costs while in industry, it rarely exceeds 25%.

Between 2013 and 2015, in the service sectors that benefit the most from the CICE, companies whose wage bill for workers paid below 2.5 times the minimum wage (Smic) is high lowered prices for their services more than other companies. However, in industry and the service sectors that mainly employ a qualified workforce, the companies that benefit from the biggest reduction in costs through the CICE have not made any more price cuts that other businesses, except in the metallurgy sector. This does not mean that their prices have not been affected by the CICE because, for them, part of the impact of the CICE has led to a moderation of prices charged by service provider businesses.