Postdoctoral Researcher at Institut des Politiques Publiques, Paris School of Economics
• Profit Sharing as a Bargaining Weapon Against Unions
[Abstract] [Paper]
There is no consensus among economists about the reasons why firms resort to profit sharing compensation, especially in larger firms. This paper presents evidence for France showing that firms with unions are more likely to resort to profit sharing than those without and, moreover, that strike incidence decreases with its usage. Inspired by these stylized facts, I develop a model to study the effects of profit sharing on union behavior that introduces two novel mechanisms. First, by making employee compensation depend on output, profit sharing makes unions internalize the cost of their strikes so that they are less inclined to organize collective actions. This in turn damages the credibility of their strike threats. Second, over time unions lose reputation, which further reduces their bargaining power. Lastly, I test the model using exogenous dates of elections of union representatives that give incentives for unions to organize collective actions in a competition for voters. I show that employers anticipate the effect of elections by increasing the usage of profit sharing. Its payment leads to a reduction in strike length the same year, and to a drop in wage growth by about 13 percent the year after. The effect is concentrated on lower occupations for whom wage growth is almost halved and driven by a reduction in the bargaining power of unions.
• Trends and Inequality in Lifetime Earnings in France (under review at AEJ: Applied)
with Bertrand Garbinti, Cecilia Garcia-Peñlosa, and Frédérique Savignac
This paper is the first to compute lifetime earnings (LTE) in France for a large number of cohorts, that entered the labour market between 1967 and 1987. We compare with evidence by Guvenen et al. (2022) for the US, documenting sharp differences between the two countries. Median LTE show similar flat trends in both countries, but in France this results from a moderate increase for both genders together with increased female participation, while in the US, LTE declines for men and sharply grows for women. There have been marked changes in age profiles, as for both genders younger cohorts have experienced a decrease in entry wages that has been more than offset by faster wage growth. Our analysis of inequality finds that it is lower when we focus on LTE than in the cross-section, and that it follows a U-shaped pattern, although the increase is much smaller in France than that observed in the US. Lastly, we also find that i) education (returns and changes in attainment) plays a key role in shaping LTE across cohorts, and ii) differences in working time explain an increasing part of the gender gap in LTE over time as both men and women have increased the number of years they work but women have done so largely through part-time employment.
• Under-Reporting of Firm Size Around Size-Dependent Regulation Thresholds: Evidence from France
with Philippe Askenazy and Thomas Breda
The existence of a peak at 49 employees in the firm size distribution in France, followed by a permanent decrease in the number of firms has been the starting point of political discourses and academic studies on the cost of size-dependent regulations at 50-employee. These features of the distribution are visible when firm size is declared by employers in fiscal data but not when it is reconstructed from individual-level social security data. This working paper explores these differences both from statistical and institutional viewpoints. It provides evidence showing that a large proportion of employers manipulate the firm size they declare in their fiscal documents. This manipulation generates the particular shape of the size distribution in the fiscal data. We discuss the rationale for such behavior: the key point is that the under-declaration in fiscal data is not subject to substantial sanctions and it can allow firms not to comply with the labor law. Event studies and comparisons of firms below and above the 50-employee threshold suggest that this threshold may only have limited effects on firm performance or growth potential. Consequently the welfare costs of the regulations at 50-employee might be smaller than what was found by some of the studies that assume a perfect compliance with the law.
• Labor Facing Capital in the Workplace: The Role of Worker Representatives
with Jérôme Bourdieu and Thomas Breda
[Abstract] [Draft on request]
The paper studies how the personal career of union (or worker) representatives is tied to the conditions in which revenues are shared between labor and capital at the firm-level. We argue that employers can have a strategic interest in either favoring or discriminating against union representatives in order to lower workers’ bargaining power. The first strategy (favoritism) amounts to “buying the social peace” and can only be implemented with willing representatives. The second (discrimination) is a way to stigmatize vindictive representatives and curb their demands, notably by discouraging other workers to join the union. The behavior of union representatives during firm negotiations and the stake of those negotiations influence employers’ willingness to use one or the other of those strategies. We provide evidence supporting this theory using a rich survey for France in 2017 combined with administrative data on earnings. Union representatives that are most active during their mandate or represent the most campaigning unions have worse career outcomes, while those that do not participate in strikes experience a wage premium. Workers are in turn more likely to think that joining a union will negatively affect their career in firms where union representatives are paid less than their colleagues or feel discriminated against. We conclude that the employer ability to affect representatives’ careers can impair the quality of workers’ representation and workers’ ability to organize collectively in order to take part in the firm decision-making process.abs_PSB
• Earnings Mobility in France in Comparison with the United-States
• Price Increasing Competition
with Maurizio Mazzocco
• Disability and Optimal Retirement Age
• The Tax Elasticity of Profit Sharing in France
• Les entreprises sous-déclarent-elles leur effectif à 49 salariés pour contourner la loi ?
with Philippe Askenazy and Thomas Breda, Policy Brief, Institut des Politiques Publiques, 2022
• Étudier les représentants du personnel pour mieux comprendre les relations de travail et les conditions du partage
de la valeur ajoutée
with Jérôme Bourdieu and Thomas Breda, Report for the French Ministry of Labor (DARES), 2021
[Report] [Interview for La semaine sociale Lamy] [Article by the French Inequality Watchdog]