What makes politicians respond to civil society organizations’ demands? I use new data on government transfers to French associations and exploit close elections to show that politicians grant more funds to ideologically close organizations when the local incumbent is a political ally and was elected by a small margin. The results are consistent with politicians and organizations exchanging financial support for electoral support. Organizations secure funding because of the votes they can deliver, not because of their campaign contributions; however the fact that transfers appear to be conditioned on support may undermine their ability to help hold politicians accountable.
With Clément Carbonnier, Clément Malgouyres and Loriane Py. Journal of Public Economics (2022).
Do workers gain from lower business taxes, and why? We estimate how a large French corporate income tax credit is passed on to wages and explore the firm- and employee-level underlying mechanisms. The amount of tax credit firms get depends on their payroll share of workers paid less than a wage threshold. Exposure to the policy thus varies both across workers depending on their wage and across firms depending on their wage structure. Using exhaustive employer-employee data, we find that half of the surplus generated by the reform falls onto workers. Wage gains load on incumbents in high-skill occupations. The wage earnings of low-skill workers – nearly all individually eligible – do not change. This heterogeneous wage incidence is unlikely to be driven by scale effects or skill complementarities. We find that the groups of workers benefiting from wage gains are also more likely to continue working for the same firm. Further, we show that firms do not change their wage-setting behavior in response to the individual eligibility status of workers as there is no bunching in the distribution of entrants’ wages. Overall, our results suggest that the wage incidence of firm taxation operates collectively through rent-sharing and benefits workers most costly to replace.
With Julia Cagé, Moritz Hengel and Nicolas Hervé.
Revise and Resubmit at the American Economic Review.
How does the media bias the news? And in particular, how much does it cost owners to ensure that journalists comply with their stance? We compile a unique dataset of journalists and guests appearing on French television and radio shows between 2002 and 2020 to quantify the role played by journalist selection and compliance in political coverage. First, we leverage the movements of thousands of journalists between media outlets, and estimate a model in which the share of coverage for each political group is determined both by journalist and outlet components. We find that outlet-level decisions account for three-fourths of the differences in political coverage; in contrast, journalists’ personal editorial preferences play only a minor role. Second, we examine how journalists respond to a major takeover-induced editorial change. Using a difference-in-differences strategy, we show that while many journalists left in response to the shock, those who stayed largely adapted to the new editorial direction. Notably, exploiting unique data on journalist salaries, we show that this compliance came at nearly no cost for the new owner, reflecting journalists’ low bargaining power in an industry in crisis.
With Julia Cagé, Agathe Denis, Malka Guillot and Simon Muchardt.
Corporate philanthropy has been increasing in Western democracies in recent decades, a rise often explained by the development of tax policies offering substantial incentives to donate to charities. Yet, corporate philanthropy is also increasingly perceived as a source of influence. In this paper, we estimate the tax price elasticity of corporate donations, and investigate how it differs depending on the recipients' purposes and the donors' characteristics. To do so, we use an exhaustive administrative panel dataset on firms' tax returns in France from 2013 to 2022, including the identity of the charities that benefit from the donations, from which we recover their purpose using state-of-the-art NLP methods. Exploiting two reforms that affect the price of donations for firms, we document significant bunching around major regulatory thresholds. We then show that the tax-price elasticity varies significantly depending on the type of beneficiaries.
With Elisa Mougin.
with Julia Cagé and Damien Leprince.
With Guillaume Chapelle and Julia Paul-Venturine.
Conseil d'Analyse Economique, Focus N°035-2019, Juin 2019.