Abstract: We study job displacement in France. In the medium run, losses in firm-specific wage premium account for a substantial share of the overall cost of displacement. However, and despite the positive correlation between premium and productivity in the cross-section of firms, we find that workers are reemployed by high productivity, low labor share firms. The observed reallocation is therefore productivity-enhancing although it is costly for workers. We show that receiving firms are less likely to conclude collective wage agreements and have lower participation rates at professional elections. Overall, our results point to a loss in bargaining power.

Abtract: We estimate behavioral responses to dividend taxation using two recent French reforms: a rate hike followed, five years later, by a cut. Exploiting tax data at household and firm-level, we find very large dividend tax elasticities to both reforms. Individuals who control firms adjust dividends instantaneously and account for most of tax-induced changes in aggregate dividends. Their firms don’t react on the investment margin. The changes in dividends are instead driven by corporate saving, as owner-managers treat firms as tax-free saving vehicles. In smaller businesses, we see a negative response of profits to taxes, consistent with the notion that firms can also be tax-free consumption vehicles.

• • See also the related IPP Report (in French): Évaluation d’impact de la fiscalité des dividendes. 

Abstract: Using French tax data linking personal and corporate returns, we measure the effective tax rates of households at the top of the comprehensive income distribution and particularly billionaires, i.e. those at the top 0.0001%. Personal tax rates fall with income within the top 1%, down to almost 0% among billionaires. The wealth tax is barely less regressive than the income tax because business assets are exempted from it and because it is capped in proportion to personal, not comprehensive, income. The corporate tax appears to nearly offset the regressivity of personal taxes, making it effectively the only tax on billionaires.

Abstract: Domestic outsourcing has grown substantially in developed countries over the past two decades. While some studies document its implications for earnings inequality, very little is known regarding the drivers of this phenomenon. This paper addresses this question by studying the impact of the staggered diffusion of broadband internet on job outsourcing by French firms. We adopt an event study design and rely on employer-employee data. Our results confirm that broadband technology is skill-biased, since it increases firm productivity and the relative demand for high-skill workers. Further, we show that broadband internet led firms to outsource some non-core occupations to service contractors, both in the low and high skill segment. In both cases, we find that employment related to these occupations became increasingly concentrated in firms specializing in these activities, and less likely to be performed in-house within firms specialized in other activities. Moreover, establishments become increasingly homogeneous in their occupational composition after the arrival of broadband internet, signaling that this technology fostered skill segregation. Finally, we provide suggestive evidence that high-skill workers experience salary gains from being outsourced, while low-skill workers lose. 

Abstract: The rise of extreme-right populist parties is a Europe-wide phenomenon. While many studies describe the individual or regional characteristics associated with high propensity to vote for the far-right, we know little about the causal impact of economic shocks on electoral support for the far-right. Over the period 1995-2012, we examine the impact of trade-shocks, as measured by exposure to low-wage country import competition, on the local vote share of the National Front, the French main far-right party, during presidential elections. We use small communities (cantons) as unit of observations and include province (département) fixed-effects, so that the identifying variation comes from within-province change in import competition exposure over time. We find evidence of a small but significantly positive impact of imports competition exposure on votes for the far-right: a one standard-deviation increase in imports-per-worker causes the change in the far-right share to increase by 7 percent of a standard deviation. Further results suggest that this effect has been increasing over the time period considered. We conduct a simple sensitivity test supporting the notion that (i) omitting local share of immigrants is likely to bias our estimate downward, and that (ii) this bias is likely to be negligible.