The perverse effects of partial employment protection reform: The case of French older workers

Luc Behaghel, Bruno Crépon and Béatrice Sédillot
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Béatrice Sédillot: DARES - Direction de l'animation de la recherche, des études et des statistiques - Ministère du Travail, de l'Emploi et de la Santé

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Abstract: French firms laying off workers aged 50 and above have to pay a tax to the unemployment insurance system, known as the Delalande tax. We evaluate the impact of this tax on layoffs as well as on hiring, taking advantage of several changes in the measure since its introduction in 1987. A legislative change in 1992 exempted firms from the tax for workers who were hired after age 50. Following this change, the transition rate from unemployment to employment increased significantly for workers over 50 compared to workers under 50. The difference is sizeable: between one third and one half of the initial transition rate. Evidence on the effect on layoffs is less clear cut. The impact is sizeable only for the most stringent tax schedule, after 1998.

Keywords: Employment protection; Older workers; Layoff; Hiring (search for similar items in EconPapers)
Date: 2008-04
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Citations: View citations in EconPapers (91)

Published in Journal of Public Economics, 2008, 92 (3-4), pp.696-721. ⟨10.1016/j.jpubeco.2007.12.004⟩

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Journal Article: The perverse effects of partial employment protection reform: The case of French older workers (2008)
Working Paper: The perverse effects of partial employment protection reform: The case of French older workers (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754293

DOI: 10.1016/j.jpubeco.2007.12.004

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