The perverse effects of partial employment protection reform : experience rating and french old workers
AbstractFrench firms laying off workers aged 50 and above have to pay a tax to the unemployment insurance system, known as the Delalande tax. This is a rare case of experience rating in the European context. We evaluate its impact on layoffs as well as on hiring, taking advantage of several changes in the measure since its introduction in 1987. A legislative change in 1992 exempted firms from the tax for workers who were hired after age 50. Following this change, the transition rate from unemployment to employment increased significantly for workers over 50 compared to workers less than 50. The difference is sizeable: between one third and one half of the initial transition rate. Evidence on the effect on layoffs is less clear cut. The impact is sizeable only for the most stringent tax schedule, after 1998.
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Bibliographic InfoPaper provided by Laboratoire d'Economie Appliquee, INRA in its series Research Unit Working Papers with number 0608.
Length: 18 pages
Date of creation: Sep 2006
Date of revision:
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Experience rating; employment protection; old workers; layoff; hiring;
Other versions of this item:
- Behaghel, Luc & Crépon, Bruno & Sédillot, Béatrice, 2005. "The Perverse Effects of Partial Employment Protection Reform: Experience Rating and French Older Workers," IZA Discussion Papers 1679, Institute for the Study of Labor (IZA).
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-01 (All new papers)
- NEP-EEC-2006-12-01 (European Economics)
- NEP-LAB-2006-12-01 (Labour Economics)
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