IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/hal-02541396.html
   My bibliography  Save this paper

Unemployment insurance and management of the older workforce in a dual labor market: Evidence from France

Author

Listed:
  • Olivier Baguelin

    (EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Delphine Remillon

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

In a context of population aging, reducing early exit from the labor force is a major challenge. In this domain, the role of unemployment insurance (UI) is probably underestimated and its statistical assessment remains insufficient. And yet, when considering a possible separation, it is likely that workers who are close to retirement, and thus their employers if they wish to reduce their workforce, care about UI. In particular, they are likely to care about whether or not, potential benefit duration is long enough to cover the time until retirement. This paper provides evidence in support of this hypothesis for some worker profiles. The analysis is conducted using data from the French employment agency over the period 2001 to 2005. It is based on a natural experiment: on January 1, 2003, the potential benefit duration of UI entrants was sharply reduced. Econometric analysis of the age patterns of UI inflow reveals that the age incentives provided by UI rules greatly influence labor market behaviors: dismissals of insiders close to retirement are often scheduled so that they can receive benefits until retirement. We estimate that the reform increased the mean age at job termination of workers dismissed close to retirement by 4months. Our findings confirm that UI rules have an impact on inflow into unemployment and that UI is viewed by some employers and/or some workers as an early retirement scheme rather than as insurance against the risk of job loss. Thus, addressing the issue of older workers' participation in the labor market requires consideration of the joint impact of UI and retirement system rules.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed f
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Olivier Baguelin & Delphine Remillon, 2014. "Unemployment insurance and management of the older workforce in a dual labor market: Evidence from France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-02541396, HAL.
    • Handle: RePEc:hal:cesptp:hal-02541396
    DOI: 10.1016/j.labeco.2014.04.005
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lukas Inderbitzin & Stefan Staubli & Josef Zweimüller, 2016. "Extended Unemployment Benefits and Early Retirement: Program Complementarity and Program Substitution," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 253-288, February.
    2. Jonathan Gruber & David A. Wise, 2010. "Social Security Programs and Retirement around the World: The Relationship to Youth Employment," NBER Books, National Bureau of Economic Research, Inc, number grub08-1.
    3. Tuit, Sander & van Ours, Jan C., 2010. "How changes in unemployment benefit duration affect the inflow into unemployment," Economics Letters, Elsevier, vol. 109(2), pages 105-107, November.
    4. Luc Behaghel & Didier Blanchet & Thierry Debrand & Muriel Roger, 2012. "Disability and Social Security Reforms: The French Case," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 301-326, National Bureau of Economic Research, Inc.
    5. Hanel, Barbara, 2010. "Financial incentives to postpone retirement and further effects on employment -- Evidence from a natural experiment," Labour Economics, Elsevier, vol. 17(3), pages 474-486, June.
    6. Day Manoli & Andrea Weber, 2016. "Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 160-182, November.
    7. Rafael Lalive & Jan Van Ours & Josef Zweimuller, 2006. "How Changes in Financial Incentives Affect the Duration of Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 1009-1038.
    8. Melika Ben Salem & Didier Blanchet & Antoine Bozio & Muriel Roger, 2010. "Labor Force Participation by the Elderly and Employment of the Young: The Case of France," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 119-146, National Bureau of Economic Research, Inc.
    9. Pellizzari, Michele, 2006. "Unemployment duration and the interactions between unemployment insurance and social assistance," Labour Economics, Elsevier, vol. 13(6), pages 773-798, December.
    10. Green, David A & Riddell, W Craig, 1997. "Qualifying for Unemployment Insurance: An Empirical Analysis," Economic Journal, Royal Economic Society, vol. 107(440), pages 67-84, January.
    11. Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October.
    12. Lalive, Rafael, 2008. "How do extended benefits affect unemployment duration A regression discontinuity approach," Journal of Econometrics, Elsevier, vol. 142(2), pages 785-806, February.
    13. Raj Chetty, 2008. "Moral Hazard versus Liquidity and Optimal Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 173-234, April.
    14. van Ours, Jan C. & Tuit, Sander, 2010. "How Changes in Unemployment Benefit Duration Affect the Inflow into Unemployment," IZA Discussion Papers 4691, Institute of Labor Economics (IZA).
    15. Konstantinos Tatsiramos & Jan C. Ours, 2014. "Labor Market Effects Of Unemployment Insurance Design," Journal of Economic Surveys, Wiley Blackwell, vol. 28(2), pages 284-311, April.
    16. Raj Chetty, 2008. "Moral Hazard versus Liquidity and Optimal Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 173-234, April.
    17. Card, David & Levine, Phillip B., 2000. "Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 107-138, October.
    18. 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.
    19. Rafael Lalive & Jan Ours & Josef Zweimüller, 2011. "Equilibrium unemployment and the duration of unemployment benefits," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1385-1409, October.
    20. Le Barbanchon, Thomas, 2016. "The effect of the potential duration of unemployment benefits on unemployment exits to work and match quality in France," Labour Economics, Elsevier, vol. 42(C), pages 16-29.
    21. Kyyrä, Tomi, 2010. "Early retirement policy in the presence of competing exit pathways: Evidence from policy reforms in Finland," Working Papers 17, VATT Institute for Economic Research.
    22. Kyyrä, Tomi & Ollikainen, Virve, 2008. "To search or not to search? The effects of UI benefit extension for the older unemployed," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2048-2070, October.
    23. Rebollo-Sanz, Yolanda, 2012. "Unemployment insurance and job turnover in Spain," Labour Economics, Elsevier, vol. 19(3), pages 403-426.
    24. Christofides, Louis N. & McKenna, C. J., 1995. "Unemployment insurance and moral hazard in employment," Economics Letters, Elsevier, vol. 49(2), pages 205-210, August.
    25. Florent Fremigacci, 2010. "Maximum Benefits Duration and Older Workers’Transitions out of Unemployment : a Regression Discontinuity Approach," Documents de recherche 10-12, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    26. Raj Chetty, 2008. "Moral Hazard vs. Liquidity and Optimal Unemployment Insurance," NBER Working Papers 13967, National Bureau of Economic Research, Inc.
    27. 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.
    28. Sylvie Blasco, 2008. "The Non Take-up of an Unemployment Insurance Reform in France," Working Papers 2008-14, Center for Research in Economics and Statistics.
    29. David A. Green & Timothy Sargent, 1998. "Unemployment Insurance and Job Durations: Seasonal and Non-Seasonal Jobs," Canadian Journal of Economics, Canadian Economics Association, vol. 31(2), pages 247-278, May.
    30. Jan C. van Ours & Milan Vodopivec, 2006. "How Shortening the Potential Duration of Unemployment Benefits Affects the Duration of Unemployment: Evidence from a Natural Experiment," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 351-378, April.
    31. Christofides, Louis N & McKenna, C J, 1996. "Unemployment Insurance and Job Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 286-312, April.
    32. Winter-Ebmer, Rudolf, 2003. "Benefit duration and unemployment entry: A quasi-experiment in Austria," European Economic Review, Elsevier, vol. 47(2), pages 259-273, April.
    33. Patricia M. Anderson & Bruce D. Meyer, 1997. "Unemployment Insurance Takeup Rates and the After-Tax Value of Benefits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 913-937.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olivier Baguelin, 2016. "Dismissals scheduling and the employment of older workers," Economics Bulletin, AccessEcon, vol. 36(4), pages 2443-2453.
    2. Kyyrä, Tomi & Pesola, Hanna, 2020. "Long-term effects of extended unemployment benefits for older workers," Labour Economics, Elsevier, vol. 62(C).
    3. Greenan, Nathalie & Messe, Pierre-Jean, 2018. "Transmission of vocational skills in the second part of careers : the effect of ICT and management changes," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages 1-6.
    4. repec:iab:iabjlr:v:52:i:1:p:art.6 is not listed on IDEAS
    5. Jessen, Jonas & Jessen, Robin & Galecka-Burdziak, Ewa & Góra, Marek & Kluve, Jochen, 2023. "The Micro and Macro Effects of Changes in the Potential Benefit Duration," IZA Discussion Papers 15978, Institute of Labor Economics (IZA).
    6. Laura Khoury & Clément Brébion & Simon Briole, 2019. "Entitled to Leave: the Impact of Unemployment Insurance Eligibility on Employment Duration and Job Quality," Working Papers halshs-02393383, HAL.
    7. Conny Wunsch & Véra Zabrodina, 2023. "Unemployment Insurance with Response Heterogeneity," CESifo Working Paper Series 10704, CESifo.
    8. repec:hal:journl:hal-04455608 is not listed on IDEAS
    9. Nathalie Greenan & Pierre-Jean Messe, 2018. "Transmission of vocational skills in the second part of careers: the effect of ICT and management changes," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-16, December.
    10. Albanese, Andrea & Picchio, Matteo & Ghirelli, Corinna, 2020. "Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs?," Labour Economics, Elsevier, vol. 65(C).
    11. Gałecka-Burdziak, Ewa & Góra, Marek & Jessen, Jonas & Jessen, Robin & Kluve, Jochen, 2021. "The effects of shortening potential benefit duration: Evidence from regional cut-offs and a policy reform," Ruhr Economic Papers 911, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Laura Khoury, 2019. "Unemployment Benefits and the Timing of Redundancies: Evidence from Bunching," PSE Working Papers halshs-02057145, HAL.
    13. Kruse, Herman & Myhre, Andreas, 2021. "Early Retirement Provision for Elderly Displaced Workers," MPRA Paper 118689, University Library of Munich, Germany, revised 21 Sep 2023.
    14. Yashiro, Naomitsu & Kyyrä, Tomi & Hwang, Hyunjeong & Tuomala, Juha, 2020. "Technology, Labour Market Institutions and Early Retirement: Evidence from Finland," IZA Discussion Papers 13990, Institute of Labor Economics (IZA).
    15. Khoury, Laura, 2023. "Unemployment benefits and redundancies: Incidence and timing effects," Journal of Public Economics, Elsevier, vol. 226(C).
    16. Anne LAMBERT & Delphine REMILLON & Mariona SEGÚ, 2023. "Getting out or switching to part‐time: Gender disparities in the impacts of corporate restructuring," International Labour Review, International Labour Organization, vol. 162(4), pages 537-560, December.
    17. Arranz, José M. & García-Serrano, Carlos, 2020. "Does unemployment benefit duration affect inflows into unemployment? The impact of a law change for older workers," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    18. Octave Brouwer & Ilan Tojerow, 2024. "Old-age unemployment and labour supply: an application to Belgium," Empirical Economics, Springer, vol. 67(1), pages 253-287, July.
    19. Bengtsson, Mats & König, Stefanie & Schönbeck, Simon & Wadensjö, Eskil, 2022. "Leaving the Labor Market Early in Sweden – Learning from International Experience," IZA Discussion Papers 15327, Institute of Labor Economics (IZA).
    20. Laura Khoury, 2021. "Unemployment Benefits and the Timing of Redundancies," Working Papers halshs-02057145, HAL.
    21. Kruse, Herman & Myhre, Andreas, 2021. "Early Retirement Provision for Elderly Displaced Workers," MPRA Paper 109431, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Albanese, Andrea & Picchio, Matteo & Ghirelli, Corinna, 2020. "Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs?," Labour Economics, Elsevier, vol. 65(C).
    2. Konstantinos Tatsiramos & Jan C. Ours, 2014. "Labor Market Effects Of Unemployment Insurance Design," Journal of Economic Surveys, Wiley Blackwell, vol. 28(2), pages 284-311, April.
    3. Tito Boeri & Jan van Ours, 2013. "The Economics of Imperfect Labor Markets: Second Edition," Economics Books, Princeton University Press, edition 1, number 10142.
    4. Inna Petrunyk & Christian Pfeifer, 2018. "Shortening the potential duration of unemployment benefits and labor market outcomes: Evidence from a natural experiment in Germany," Working Paper Series in Economics 377, University of Lüneburg, Institute of Economics.
    5. Kyyrä, Tomi & Pesola, Hanna & Rissanen, Aarne, 2017. "Unemployment Insurance in Finland: A Review of Recent Changes and Empirical Evidence on Behavioral Responses," Research Reports 184, VATT Institute for Economic Research.
    6. Zweimüller, Josef, 2018. "Unemployment insurance and the labor market," Labour Economics, Elsevier, vol. 53(C), pages 1-14.
    7. Laura Khoury & Clément Brébion & Simon Briole, 2019. "Entitled to Leave: the Impact of Unemployment Insurance Eligibility on Employment Duration and Job Quality," Working Papers halshs-02393383, HAL.
    8. D. G. C. Britto, 2016. "Unemployment Insurance and the Duration of Employment: Evidence from a Regression Kink Design," Working Papers wp1058, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. Arranz, José M. & García-Serrano, Carlos, 2020. "Does unemployment benefit duration affect inflows into unemployment? The impact of a law change for older workers," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    10. Martins, Pedro S., 2021. "Working to get fired? Unemployment benefits and employment duration," Journal of Policy Modeling, Elsevier, vol. 43(5), pages 1016-1030.
    11. Jessen, Jonas & Jessen, Robin & Galecka-Burdziak, Ewa & Góra, Marek & Kluve, Jochen, 2023. "The Micro and Macro Effects of Changes in the Potential Benefit Duration," IZA Discussion Papers 15978, Institute of Labor Economics (IZA).
    12. Rafael Lalive & Jan Ours & Josef Zweimüller, 2011. "Equilibrium unemployment and the duration of unemployment benefits," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1385-1409, October.
    13. Diogo Britto, 2016. "Unemployment Insurance and the Duration of Employment: Theory and Evidence from a Regression Kink Design," DISCE - Working Papers del Dipartimento di Economia e Finanza def048, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    14. Kyyrä, Tomi & Pesola, Hanna, 2020. "The effects of unemployment benefit duration: Evidence from residual benefit duration," Labour Economics, Elsevier, vol. 65(C).
    15. Florent Fremigacci, 2010. "Maximum Benefits Duration and Older Workers’Transitions out of Unemployment : a Regression Discontinuity Approach," Documents de recherche 10-12, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    16. Le Barbanchon, Thomas, 2016. "The effect of the potential duration of unemployment benefits on unemployment exits to work and match quality in France," Labour Economics, Elsevier, vol. 42(C), pages 16-29.
    17. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    18. Gutierrez, Italo A., 2016. "Job insecurity, unemployment insurance and on-the-job search. Evidence from older American workers," Labour Economics, Elsevier, vol. 41(C), pages 228-245.
    19. Pedro S. Martins, 2015. "Working to get fired? Regression discontinuity effects of unemployment benefit eligibility on prior employment duration," Working Papers 61, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    20. Arranz, José M. & García-Serrano, Carlos, 2023. "Assistance benefits and unemployment outflows of the elderly unemployed: The impact of a law change," The Journal of the Economics of Ageing, Elsevier, vol. 26(C).

    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:hal-02541396. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.