Work in Progress
Employment Effects of Restricting Fixed Term Contracts: Theory and Evidence (with Pierre Cahuc, Franck Malherbet and Pedro S. Martins)
Abstract: This paper examines a labor law reform implemented in Portugal in 2009 which restricted the use of fixed-term contracts in establishments created by large firms above a specific size threshold. First, drawing on linked employer-employee longitudinal data and regression discontinuity methods, we find that, while the reform was successful in reducing the number of fixed-term jobs, it did not lead to the increase of permanent contracts and decreased employment in large firms. Second, to evaluate general equilibrium effects, we build and estimate a directed search and matching model with endogenous number of establishments and jobs which takes into account the main aspects of the reform. Our framework shows that the reform has spillover effects which increase employment in small firms, even if these firms were not directly targeted by the reform. We find that the reform has ambiguous effects on total employment, reduces the welfare of unemployed workers and improves that of workers with permanent contracts.
The Effects of Minimum Working Hours: Theory and Evidence
Abstract: This paper studies how firms respond to the implementation of a floor for hours of work. In 2014, the French government introduced a minimum work week of 24 hours in order to reduce involuntary part time employment. I rely on linked employer-employee data and an event study design to assess the employment effects. I find that the reform reduced hires and the number of workers in the firm (negative extensive margin effect) and increased average hours worked (positive intensive margin effect). Overall, total hours worked in the firm decreased significantly. Second, I find that the negative effect on employment is four to six times larger for women as compared to men. This results from both a stronger decrease in part time employment for women and a stronger increase in full time employment for men. These findings suggest that firms tend to substitute men working full time for women working less than 24 hours. Third, I rely on a structural model in order to account for potential indirect reallocation mechanisms induced by the introduction of minimum working hours. I build a search and matching model with heterogeneous workers and heterogeneous large firms. The framework allows for within- and between-firm heterogeneity in hours worked. The model predicts positive general equilibrium effects on employment and reallocation patterns that could differ for men and women.
Job Separations by Mutual Agreement and Employers' Willingness to Pay to Avoid Labor Court