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.
• Inequality and Mobility in lifetime incomes in France
with Bertrand Garbinti, Cecilia Garcia-Peñlosa, and Frédérique Savignac
[Abstract] [Draft on Request]
We examine the evolution of lifetime earnings and the associated mobility patterns in France. We use individual data to characterize changes in income dynamics across cohorts born between 1942 and 1960 for which we have complete earnings histories. The data show that after increasing for several cohorts median incomes have been flat. When we consider men and women separately, we find that both men’s and women’s earnings have grown during the entire period, moderately for men and somewhat faster for women, but both exhibit similar dynamics. This contrasts with evidence for the US, where flat overall earnings profiles are the result of a decline for men and sharp growth for women. Lifetime earnings inequality exhibits small changes, following a U-shaped pattern but without the marked increase observed in the US. The stability of lifetime inequality seems to be the result of a period of declining dispersion in annual (cross-sectional) earnings and a subsequent increase in earnings mobility. These results point towards both institutions, such as the minimum wage, and social norms related to female participation as important factors in shaping lifetime earnings dispersion and mobility. When we look at more recent cohorts, we find that mobility has fallen considerably, raising the question of whether an increase in lifetime earnings dispersion is starting to take place in France.
• 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]