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Stricter employment protection and firms’ incentives to sponsor training: The case of French older workers

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Author Info

  • Messe, Pierre-Jean
  • Rouland, Bénédicte

Abstract

From French data, this paper uses a difference-in-differences approach combined with propensity score matching to identify the effect of an exogenous change in employment protection among older workers on firm’s incentives to sponsor training. Laying off workers aged 50 and above, French firms have to pay a tax to the unemployment insurance system, known as the Delalande tax. In 1999, the measure was subjected to a reform that increased due taxes but that did not concern equally all firms. We find that this exogenous shock to employment protection for older workers substantially rises firms’ incentives to train the 45-49 age group of workers. This result confirms predictions of the simple labor market model we develop in a first stage.

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Bibliographic Info

Paper provided by CEPREMAP in its series CEPREMAP Working Papers (Docweb) with number 1206.

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Length: 25 pages
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:cpm:docweb:1206

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Related research

Keywords: older workers; employment protection; firms’ training incentives;

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  1. repec:tep:teppwp:wp1010 is not listed on IDEAS
  2. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  3. Jean-Olivier Hairault & Francois Langot & Thepthida Sopraseuth, 2010. "Distance to Retirement and Older Workers' Employment: The Case for Delaying the Retirement Age," Journal of the European Economic Association, MIT Press, vol. 8(5), pages 1034-1076, 09.
  4. Arnaud Chéron & Jean‐Olivier Hairault & François Langot, 2011. "Age‐Dependent Employment Protection," Economic Journal, Royal Economic Society, vol. 121(557), pages 1477-1504, December.
  5. Picchio, M. & Ours, J.C. van, 2011. "Retaining through Training; Even for OlderWorkers," Discussion Paper 2011-040, Tilburg University, Center for Economic Research.
  6. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
  7. Michele Belot & Jan Boone & Jan Van Ours, 2007. "Welfare-Improving Employment Protection," Economica, London School of Economics and Political Science, vol. 74(295), pages 381-396, 08.
  8. Arnaud Chéron & Bénédicte Rouland, 2011. "Inefficient Job Destructions and Training with Hold‐up," LABOUR, CEIS, vol. 25(4), pages 397-420, December.
  9. Schnalzenberger, Mario & Winter-Ebmer, Rudolf, 2009. "Layoff tax and employment of the elderly," Labour Economics, Elsevier, vol. 16(6), pages 618-624, December.
  10. Hairault, Jean-Olivier & Chéron, Arnaud & Langot, François, 2007. "Job Creation and Job Destruction over the Life Cycle: The Older Workers in the Spotlight," IZA Discussion Papers 2597, Institute for the Study of Labor (IZA).
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