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Education and employment protection

Author

Listed:
  • Olivier Charlot

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

  • Franck Malherbet

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

Abstract

In this paper, we generalize the study of the return to education undertaken in e.g. Laing et al. (1995) and Burdett and Smith (2002) to an environment where the link between education and job destruction is taken into account. This enables us to study how a European-type Employment Protection Legislation (EPL) with heavily regulated long-term contracts and more flexible short-term contracts affects the return to schooling, equilibrium unemployment and welfare. In this context, we show that firing costs and temporary employment have opposite effects on the rate of use of human capital and thus, on educational investments. We furthermore demonstrate that a laissez-faire economy with no regulation is inefficient as it is characterized by insufficient educational investments leading to excess job destruction and inadequate job creation. By stabilizing employment, firing costs could spur educational investments and therefore lead to gains in welfare and productivity, though a first-best policy would be to subsidize education. However, there is little chance that a rise in firing costs in a dual (European-type) EPL context would raise the incentives to schooling and aggregate welfare.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Olivier Charlot & Franck Malherbet, 2013. "Education and employment protection," Post-Print hal-02979492, HAL.
    • Handle: RePEc:hal:journl:hal-02979492
    DOI: 10.1016/j.labeco.2012.09.004
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    Citations

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    Cited by:

    1. Bottasso, Anna & Bratti, Massimiliano & Cardullo, Gabriele & Conti, Maurizio & Sulis, Giovanni, 2025. "Labor market regulations and firm adjustments in skill demand," Journal of Public Economics, Elsevier, vol. 242(C).
    2. Garcia-Murillo, Martha, 2015. "The impact of ICTs on employment in Latin America: A call for comprehensive regulation," 26th European Regional ITS Conference, Madrid 2015 127139, International Telecommunications Society (ITS).
    3. repec:ilo:ilowps:481497 is not listed on IDEAS
    4. Mariusz Zielinski, 2018. "Effect of the economic situation on employment and its structure in the Central and Eastern European countries," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 17(3), pages 329-337, September.
    5. Mariusz Zieliński, 2022. "The Effect of the COVID-19 Pandemic on the Labor Markets of the Visegrad Countries," Sustainability, MDPI, vol. 14(12), pages 1-20, June.
    6. Thomas Davoine, 2023. "Flexicurity, education and optimal labour market policies," LABOUR, CEIS, vol. 37(4), pages 592-625, December.
    7. Bolli, Thomas & Kemper, Johanna, 2015. "Evaluating the Impact of Employment Protection on Firm-Provided Training in an RDD Framework," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112895, Verein für Socialpolitik / German Economic Association.
    8. Nathalie Greenan & Ekaterina Kalugina & Mouhamadou Moustapha Niang, 2017. "Work Organisation and Workforce Vunerability to Non-Employment: Evidence from OECD’s Survey on Adult Skills (PIAAC) [Organisation du travail et vulnérabilité au non-emploi : une étude empirique à p," Working Papers hal-02162457, HAL.
    9. Mariusz Zielinski, 2015. "Unemployment And Labor Market Policy In Visegrad Group Countries," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 10(3), pages 185-201, September.
    10. Le Barbanchon, Thomas. & Malherbet, Franck., 2013. "An anatomy of the French labour market : country case studies on labour market segmentation," ILO Working Papers 994814973402676, International Labour Organization.
    11. repec:spo:wpmain:info:hdl:2441/772g8m5php8ui8eticr0ak867g is not listed on IDEAS

    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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