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Stricter employment protection and firms' incentives to sponsor training

Author

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  • Pierre-Jean Messe

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

  • Bénédicte Rouland

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

Abstract

This paper uses a difference-indifferences approach, combined with propensity score matching, to identify the effect of older workers employment protection on French firms' incentives to sponsor training. Between 1987 and 2008, French firms laying off workers aged over 50 had 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 the tax, but only for large firms. We find that this exogenous increase substantially raised firms' incentives to train workers aged 45-49 but had no impact on the training rates among workers aged over 50. From a simple model with endogenous firing and training decisions, we give a theoretical illustration of these results.

Suggested Citation

  • Pierre-Jean Messe & Bénédicte Rouland, 2014. "Stricter employment protection and firms' incentives to sponsor training," Post-Print hal-04455488, HAL.
    • Handle: RePEc:hal:journl:hal-04455488
    DOI: 10.1016/j.labeco.2014.07.004
    Note: View the original document on HAL open archive server: https://hal.science/hal-04455488v1
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    References listed on IDEAS

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    1. Lepinteur, Anthony & Clark, Andrew E. & D'Ambrosio, Conchita, 2024. "Unsettled: job insecurity reduces home-ownership," LSE Research Online Documents on Economics 126786, London School of Economics and Political Science, LSE Library.

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