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Working Paper
The Aggregate Implications of Size Dependent Distortions
This paper examines the aggregate implications of size-dependent distortions. These regulations misallocate labor across firms and hence reduce aggregate productivity. It then considers a case-study of labor laws in France where firms that have 50 employees or more face substantially more regulation than firms that have less than 50. The size distribution of firms is visibly distorted by these regulations: there are many firms with exactly 49 employees. A quantitative model is developed with a payroll tax of 0.15% that only applies to firm above 50 employees. Removing the regulation improves ...
Working Paper
Training and Search on the Job
The paper studies human capital accumulation over workers? careers in an on the job search setting with heterogenous firms. In renegotiation proof employment con- tracts, more productive firms provide more training. Both general and specific training induce higher wages within jobs, and with future employers, even conditional on the future employer type. Because matches do not internalize the specific capital loss from employer changes, specific human capital can be over-accumulated, more so in low type firms. While validating the Acemoglu and Pischke (1999) mechanisms, the analysis ...
Working Paper
Size-dependent regulations, firm size distribution, and reallocation
In France, firms with 50 employees or more face substantially more regulation than firms with less than 50. As a result, the size distribution of firms is visibly distorted: there are many firms with exactly 49 employees. We model the regulation as the combination of a sunk cost that must be paid the first time the firm reaches 50 employees, and a payroll tax that is paid each period thereafter when the firm operates with more than 50 employees. We estimate the model using indirect inference by fitting the discontinuity of the size distribution. The key finding is that the regulation is ...
Journal Article
The Aggregate Implications of Size-Dependent Distortions
This article examines the aggregate implications of size-dependent distortions. These regulations misallocate labor across firms and hence reduce aggregate productivity. The author then considers a case study of labor laws in France, where firms with 50 employees or more face substantially more regulation than firms with fewer than 50. The size distribution of firms is visibly distorted by these regulations: There are many firms with exactly 49 employees. A quantitative model is developed with a payroll tax of 0.15 percent that applies only to firms with more than 50 employees. Removing the ...
Working Paper
Persistence of Shocks and the Reallocation of Labor
This paper proposes a theoretical and quantitative analysis of the reallocation of labor across firms in response to idiosyncratic shocks of different persistence. Creating and destroying jobs is costly and workers are paid a share of the value of the marginal worker. The model predicts that employment and labor costs react differently to transitory shocks and permanent shocks. Quantitative evaluation of the model on a panel of French firms shows the model?s performance. Modest adjustment costs are needed to reproduce observed job reallocation and inaction rates. Removing adjustment costs ...