abstract: Institutions and digital technologies have eased the supply of own-account labor to firms, creating a flexible workforce outside official headcounts. Yet the firm-side consequences of this margin remain underexplored. This paper provides the first firm-level evidence on how firms reorganize when access to freelancers expands. I leverage a French reform that sharply lowered entry costs into solo self-employment as a quasi-experimental setting. Using universal administrative data and a shift-share approach, I show that when freelancers become more available in the occupations a firm uses, firms reduce their payroll workforce, increase value added, and retain the gains as higher profits. Wage patterns reflect compositional upgrading rather than rent sharing: the retained payroll workforce tends toward a smaller, higher-paid core, with a hollowing-out effect on payroll outcomes. The evidence fills a gap in the existing supply-side-focused literature by showing that freelance labor increases firms’ profitability yet intensifies labor-market segmentation, raising policy questions about classification and the incidence of flexibility.

abstract: This paper models firms’ linear responses in employment adjustments triggered by large, unexpected deviations in product demand. We hypothesize that firms’ employment decisions depend not only on their expected demand but also on significant deviations from those expectations. When these deviations are large enough, firms may engage in abrupt employment adjustments that are qualitatively different from their responses to regular fluctuations. Identifying these thresholds allows us to distinguish between small and large shocks in demand, thereby testing for discontinuous adjustments in labor demand. We find evidence of non-linear employment responses to demand deviations: small shocks are absorbed with minimal adjustment, while larger shocks trigger substantial changes in employment.

abstract: How do learning and obsolescence play a role in the ability of firms to generate revenues? I use administrative data on French companies from 2008 to 2020. I characterize the evolution of the survival and cohort components of idiosyncratic TFP over the firm’s lifespan. First, more recent cohorts are more productive at entry compared to what firms with older vintages were when they entered the market. Second, independently of the technology and economic environment available at the time of entry, surviving firms experience productivity growth over time. Lastly, sector-specific characteristics predominantly account for variations in firms’ TFP differentials and faster TFP growth for younger firms, while the technology at entry become obsolescent at for older firms driving down their productivity levels.