The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market (Job Market Paper), [PDF]
Media: Newsletter Chaire Sécurisation des Parcours Professionnels
Abstract: This paper provides new evidence on how firms and workers adjust to a restriction on low-hour jobs. I exploit a unique reform introducing a minimum workweek of 24 hours in France in 2014 affecting 15% of jobs. Drawing on linked employer-employee data and an event study design, I find a firm-level reduction in the number of jobs and an increase in average hours per worker. Overall, total hours worked in the firm decreased significantly, showing imperfect substitutability between workers and hours. The effects differ by gender: part-time female workers were replaced by full-time male workers. Importantly, reduced-form evidence indicates the reallocation of workers from firms highly exposed to the policy to firms less exposed. To quantify the aggregate impact taking into account these effects, I build and estimate a search and matching model with heterogeneous workers and firms. I find that the minimum workweek destroyed 1% of jobs but no effect on total hours, due to positive general equilibrium effects. Finally, the gender gap in welfare increased by 3% because women were more affected by the direct negative employment effects and benefited less from reallocation effects.
Spillover Effects of Employment Protection (with Pierre Cahuc, Franck Malherbet and Pedro S. Martins), Submitted [PDF]
[Previously titled "Employment Effects of Restricting Fixed-Term Contracts: Theory and Evidence"]
CEPR discussion paper, IZA discussion paper
Media: Vox column, Expresso, Portuguese Economy Research Report, Atlantico
Abstract: Estimates of the impact on employment protection generally rely on reduced-form methods, assuming that there are no indirect effects between firms. This paper exploits a labor law reform implemented in Portugal in 2009 which restricted the use of fixed-term contracts for large firms above a specific size threshold, to investigate and quantify spillover effects. Standard reduced-form estimates based on the hypothesis of absence of spillover towards firms for which the reform does not apply yield a negative impact on employment of about 1.5%. However, we find evidence of significant spillovers. The estimation of the macroeconomic effects of the reform with a search and matching model accounting for spillovers yields an almost negligible employment impact of the reform, more than ten times smaller than that obtained with the reduced form estimates. This result underlines that the numerous reduced-form estimates of the impact of employment protection that rely on firm size thresholds must be interpreted with caution.
Selected work in progress
Does Workweek Reduction Narrow the Gender Gap? Evidence from France (with Claire Montialoux, Elio Nimier-David, Alexandra Roulet and Nina Roussille)
Should we Decrease the Uncertainty of Firing Costs? Evidence from France (with Pierre Cahuc, Stéphane Carcillo, Flavien Moreau and Bérengère Patault)
Employers' Willingness to Pay to Avoid Conflict: Evidence from Separations by Mutual Agreements (with Benjamin Schoefer)