Protection de l'emploi et performance du marché du travail. Commentaire de Bertrand Martinot

Abstract

Job protection has often been blamed as a source of the poor employment performance of many European countries. Since the beginning of the 90s, much attention has been devoted to the theoretical and the empirical analysis of the consequences of labor market regulation on labor market performance. In this paper, we summarize these results by considering three main indicators of job protection: administrative firing costs, notice periods and short-term contracts. We study the effects of job protection policies thanks to an equilibrium matching model calibrated on the French labor market. Our results suggest that administrative firing costs and notice periods have no significant effect on the unemployment rate. However these instruments profoundly modify the composition of unemployment as well as labor market dynamics. Ultimately, we consider the potential employment protection effect of an US based experience rated scheme on the French labor market. To a certain extent, this system is here proven to improve labor market performance.