Working papers
Working papers
The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market [PDF]
Revise and Resubmit at the Review of Economic Studies
Awards: EALE job market tour 2023, Restud tour 2023, W.E. Upjohn Institute dissertation award, Prix Jeune Docteur Banque de France
Abstract: This paper examines the effects of working time regulations on the allocation of workers and hours. I exploit a unique reform introducing a minimum workweek of 24 hours in France in 2014, affecting 15% of jobs. Drawing on administrative data and an event study design, I find a firm-level reduction in total hours worked, showing imperfect substitutability between workers and hours. The effects differ by gender: women working part-time were replaced by men working longer hours. Importantly, workers also reallocate between firms. To quantify the aggregate impact accounting for these effects, I build and estimate a search and matching model with firm and worker heterogeneity. Overall, the minimum workweek increased total hours worked by 1% due to positive general equilibrium effects, but concentrated hours among fewer workers as unemployment rose by 2%. Gender inequality increased because of the within-firm effects and less reallocation of women between firms.
Conflict in Dismissals (with Benjamin Schoefer) [PDF]
NBER working paper, CEPR discussion paper, Note in French
Media: Les Echos
Abstract: How do the employer and the worker interact during a dismissal? This paper tests whether they cooperate to minimize costs, or instead engage in conflict--i.e., deliberately amplify costs. We leverage a unique feature of the French labor market: an employer and a worker can jointly opt to replace a costly dismissal by a cheaper and more flexible ``separation by mutual agreement'' (SMA). Introduced in 2008, SMAs eliminate red tape costs, enable severance pay bargaining, and preclude litigation. However, we find that only 12% of dismissals are resolved through SMAs--far below the efficient level predicted by standard bargaining models. Surveying HR directors, we identify three drivers of conflict that hinder cost minimization: (i) hostility between the employer and the employee, (ii) employers using dismissals as a ``discipline device'' to maintain incentives, and (iii) asymmetric beliefs about subsequent labor court outcomes. Using counterfactual scenarios in the survey, we find that removing these three drivers of conflict would increase SMA adoption from 12% to 67% of dismissals. We confirm that less conflictual dismissals--due to either better employer-employee relationships or workers benefiting from early retirement--end more often as SMAs.
Location Effects or Sorting? (with Benny Kleinman and Elio Nimier-David) [PDF]
Abstract: Why are wages in cities like New York or Paris higher than in others? This paper uses firm mobility to separate the role of ``location effects’’ (e.g., local geography, infrastructure, and agglomeration) from the spatial sorting of workers and firms. Using French administrative records and U.S. commercial data, we first document that firm mobility is widespread: 4% of establishments relocate annually. Establishments retain their main activity and structure as they move, but adjust their workforce and wages. Combining firm and worker mobility, we then decompose wage disparities across French commuting zones. We find that spatial wage differences are largely driven by the sorting and co-location of workers and firms: location effects account for only 2–5% of disparities, while differences in the composition of workers and establishments account for around 30% and 15%, respectively. The remaining half is accounted for by the co-location of high-wage workers and firms, especially in cities with high location effects. Revisiting the elasticity of local wages to population density, we find a significant coefficient of 0.007--two to three times lower than estimates not controlling for firm composition.
Employment Effects of Restricting Fixed-Term Contracts: Theory and Evidence (with Pierre Cahuc, Franck Malherbet and Pedro S. Martins)
CEPR discussion paper, IZA discussion paper
Media: Vox column, Expresso, Portuguese Economy Research Report, Atlantico
Abstract: This paper examines a labor law reform implemented in Portugal in 2009 which restricted the use of fixed-term contracts to reduce labor market segmentation. The reform targeted establishments created by large firms above a specific size threshold, covering about 15% of total employment. 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 increase the number of permanent contracts and decreased employment in large firms. However, we find evidence of positive spillovers to small firms that may bias reduced form estimates. To evaluate general equilibrium effects, we build and estimate a directed search and matching model with endogenous number of establishments and jobs. We find spillover effects that induce small biases on reduced form estimates but that significantly change the evaluation of the overall impact of the reform because they diffuse to the whole economy. We estimate that the reform slightly reduced aggregate employment and had negative effects on the welfare of employees and unemployed workers.
Selected work in progress
The Impact of Wages and Payroll Taxes on Employment: Economy-Wide Elasticities from the French 35-hour reform (with Claire Montialoux, Elio Nimier-David, Alexandra Roulet and Nina Roussille)
Employment Protection Reforms in the Aggregate Economy (with Pierre Cahuc, Franck Malherbet and Pedro S. Martins)
Policy work
Evaluation of the impact of the severance scale for unfair dismissals (with Pierre Cahuc, Stéphane Carcillo, Flavien Moreau and Bérengère Patault)
Media: Le Monde, BFM TV, FranceInfo