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

  • Pierre-Jean Messe
  • Benedicte Rouland

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.

(This abstract was borrowed from another version of this item.)

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File URL: http://tepp.eu/RePEc/files/teppwp/TEPP-WP-12-04-PJM-BR.pdf
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Paper provided by TEPP in its series TEPP Working Paper with number 2012-04.

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Date of creation: 2012
Date of revision:
Handle: RePEc:tep:teppwp:wp12-04
Contact details of provider: Postal: Université Paris-Est Marne La Vallée, 5 bd Descartes, 77454 Champs sur Marne
Web page: http://www.tepp.eu/

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  1. Wolfgang Lechthaler, 2009. "The interaction of firing costs and firm training," Empirica, Springer, vol. 36(3), pages 331-350, August.
  2. 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).
  3. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, 06.
  4. Arnaud Chéron & Jean-Olivier Hairault & François Langot, 2011. "Age-Dependent Employment Protection," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00623282, HAL.
  5. Montizaan, Raymond & Cörvers, Frank & De Grip, Andries, 2010. "The effects of pension rights and retirement age on training participation: Evidence from a natural experiment," Labour Economics, Elsevier, vol. 17(1), pages 240-247, January.
  6. Arnaud Chéron & Bénédicte Rouland & François-Charles Wolf, 2010. "Returns to firm-provided training in France:Evidence on mobility and wages," TEPP Working Paper 2010-10, TEPP.
  7. Arnaud Chéron & Bénédicte Rouland, 2011. "Inefficient Job Destructions and Training with Hold‐up," LABOUR, CEIS, vol. 25(4), pages 397-420, December.
  8. 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.
  9. M. Picchio & J. C. Van Ours, 2011. "Retaining through Training Even for Older Workers," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/748, Ghent University, Faculty of Economics and Business Administration.
  10. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  11. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
  12. Behaghel, Luc & Crépon, Bruno & Sédillot, Béatrice, 2008. "The perverse effects of partial employment protection reform: The case of French older workers," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 696-721, April.
  13. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  14. Schnalzenberger, Mario & Winter-Ebmer, Rudolf, 2009. "Layoff tax and employment of the elderly," Labour Economics, Elsevier, vol. 16(6), pages 618-624, December.
  15. 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).
  16. repec:dgr:kubcen:2011040 is not listed on IDEAS
  17. 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.
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