The Effects of Minimum Working Hours: Theory and Evidence (Job Market Paper), new version coming soon
Abstract: Working time regulations remain controversial labor market policies. This paper provides new evidence on how firms and workers adjust to a floor on hours of work by exploiting a unique reform introducing a minimum workweek of 24 hours in France. 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 substituability between workers and hours. Negative employment effects are two times larger for women as compared to men. Importantly, reduced-form evidence indicates some reallocation of workers between firms, suggesting general equilibrium effects. To quantify the aggregate impact of the policy, I build and estimate a search and matching model with heterogeneous workers and firms. I find that the minimum workweek destroyed 1% of jobs. Yet, the aggregate impact on total hours is negligible: while firm-level effects are negative, the structural framework reveals positive indirect effects overlooked by reduced-form methods. 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.
Employment Effects of Restricting Fixed Term Contracts: Theory and Evidence (with Pierre Cahuc, Franck Malherbet and Pedro S. Martins), Submitted
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
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)