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

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  • Pierre-Jean Messe
  • Benedicte Rouland

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 provide 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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Suggested Citation

  • Pierre-Jean Messe & Benedicte Rouland, 2012. "Stricter employment protection and firms’ incentives to train: The case of French older workers," TEPP Working Paper 2012-04, TEPP.
    • Handle: RePEc:tep:teppwp:wp12-04
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    References listed on IDEAS

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    Cited by:

    1. Ann Barbara Bauer & Reiner Eichenberger, 2017. "Endogenous aging: How statutory retirement age drives human and social capital," CREMA Working Paper Series 2017-02, Center for Research in Economics, Management and the Arts (CREMA).

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