The Wage of Temporary Agency Workers, with Antonin Bergeaud, Clément Malgouyres, Sara Signorelli, Thomas Zuber, July 2024
Using French administrative data we estimate the wage gap distribution between in-house and temporary agency workers working in the same establishment and the same occupation. The average wage gap is about 3%, but the gap is negative in more than 25% of establishment × occupation cells. We develop and estimate a search and matching model which shows that while the wage gap is largely inefficient, eliminating it reduces efficiency, as it also arises from objective factors that contribute to the efficient allocation of jobs.
The Heterogeneous Impact of Short-Time Work: From Saved Jobs to Windfall Effects, with Francis Kramarz, Sandra Nevoux and Nathan Veira, May 2024, R&R Journal of the European Association Vox eu Column
To understand which firms take-up short-time work and which workers they enroll in this program, we provide a model which shows that short-time work may save jobs in firms hit by strong negative revenue shocks, but not in less severely-hit firms, where hours worked are reduced, without saving jobs. Using detailed data on the administration of the program covering the universe of French establishments in the 2008-2009 Great Recession, we find that short-time work did indeed save jobs and increase hours of work in firms faced with large negative shocks. These firms have been able to recover rapidly in the aftermath of the Recession thanks to short-time work. We also provide evidence of large windfall effects which significantly increased the cost of the policy per job saved; yet we also find that short-time work remains more cost-efficient at saving jobs than wage subsidies.
School to work transitions with Jérémy Hervelin, Arne Uhlendorff
Low-skilled young people have great difficulty in finding employment, especially in France. This project experiments interventions by the public employment service in vocational schools to improve the access of these young people to employment.
Employment Effects of Restricting Fixed-Term Contracts:Theory and Evidence, with Pauline Carry, Franck Malherbet and Pedro Martins, January 2022, Vox eu Column
This project 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, 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.
The Detrimental Effects of Job Protection on Employment: Evidence From France, with Franck Malherbet and Julien Prat , May 2019, Vox eu Column, (R&R Journal of Political Economy)
According to French law, employers have to pay at least six months salary to employees whose seniority exceeds two years in case of unfair dismissal. We show, relying on data, that this regulation entails a hike in severance payments at two-year seniority which induces a significant rise in the job separation rate before the two-year threshold and a drop just after. The layoff costs and its procedural component are evaluated thanks to the estimation of a search and matching model which reproduces the shape of the job separation rate. We find that total layoff costs increase with seniority and are about four times higher than the expected severance payments at two years of seniority. Counterfactual exercises show that the fragility of low-seniority jobs implies that layoff costs reduce the average job duration and increase unemployment for a wide set of empirically relevant parameters.
When Correspondence Studies Fail to Detect Hiring Discrimination, with Stéphane Carcillo, Andreea Minea and Marie-Anne Valfort, September 2019, Vox eu Column.
Based on a correspondence study conducted in France, we show that fictitious low-skilled applicants in the private sector are half as likely to be called back by the employers when they are of North African rather than French origin. By contrast, the origin of the fictitious applicants does not impact their callback rate in the public sector. We run a survey revealing that recruiters display similarly strong negative discriminatory attitudes towards North Africans in both sectors. We set out a model explaining why differences in discrimination at the stage of invitation for interviews can arise when recruiters display identical discriminatory attitudes in both sectors. The estimation of this model shows that discrimination at the invitation stage is a poor predictor of discrimination at the hiring stage. This suggests that many correspondence studies may fail to detect hiring discrimination and its extent.
Inefficient Short Time work, with Sandra Nevoux, September 2017, Vox eu Column
This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers' contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating.
The cost of flexibility enhancing structural reforms. A literature review, with Tito Boeri and André Zylberberg, October 2015, OECD Economic Department working paper n°1264.
This survey highlights the key results of the empirical literature concerning the costs of flexibility enhancing reforms in product and labour markets. The documented costs include reduced employment, loss of government revenue, undesirable distributional consequences and political instability. The literature suggests that: i) once implemented, product and labour market reforms affect prices and quantities quite rapidly; ii) there are no major differences between the overall effects in the short and long run; iii) the costs of reforms are very much related to interactions with other policies and institutions; and iv) the costs of reforms change over the business cycle.