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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
Date of revision:
Handle: RePEc:cpm:docweb:1206
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  1. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  2. Arna Chéron & Bénédicte Rouland & François Charles Wolff, 2010. "Returns to firm-provided training in France: Evidence on mobility and wages," Working Papers halshs-00809753, HAL.
  3. 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.
  4. Montizaan Raymond & Cörvers Frank & Grip Andries de, 2009. "The effects of pension rights and retirement age on training participation: Evidence from a natural experiment," ROA Research Memorandum 012, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  5. Picchio, M. & van Ours, J.C., 2011. "Retaining through Training; Even for OlderWorkers," Discussion Paper 2011-040, Tilburg University, Center for Economic Research.
  6. Schnalzenberger, Mario & Winter-Ebmer, Rudolf, 2009. "Layoff tax and employment of the elderly," Labour Economics, Elsevier, vol. 16(6), pages 618-624, December.
  7. 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.
  8. Chéron, Arnaud & Hairault, Jean-Olivier & Langot, François, 2008. "Age-Dependent Employment Protection," IZA Discussion Papers 3851, Institute for the Study of Labor (IZA).
  9. 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).
  10. 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).
  11. Arnaud Chéron & Bénédicte Rouland, 2011. "Inefficient Job Destructions and Training with Hold‐up," LABOUR, CEIS, vol. 25(4), pages 397-420, December.
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