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

  • Messe, Pierre-Jean
  • Rouland, Bénédicte

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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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
Handle: RePEc:cpm:docweb:1206
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