Working Papers

Selected for the 2023 EALE job market Tour

Abstract: Do college expansion policies promote local economic development? This paper exploits a massive construction policy of new colleges in France over the 1990s to assess the causal effect of higher education establishments. I start by studying their impact on education, firm dynamics, employment and wages at the city level. Leveraging the staggered implementation of the policy in an event-study design, I find a persistent rise in the level of education of the local workforce. Firm creation subsequently increases by 10% on average across all major industries. The rise in (i) tradable and (ii) skill-intensive industries indicates that the supply of educated workers played a major role in increasing firm entry. Incumbent firms experienced lower growth and a higher exit rate following the policy, suggesting displacement effects. Overall, the positive effects dominate, resulting in increased economic activity in treated cities. Employment stays constant but is subject to large composition effects: it increases for young skilled workers but decreases for older workers. In addition, province-level analysis suggests that new colleges had non-negative spillover effects on surrounding areas. Finally, I complement city-level results with findings on the long-run individual effects. Relying on differences between cohorts induced by the timing of the policy, I find that cohorts directly exposed to new colleges became more educated, more likely to be employed and hold more skilled positions.

With David Sraer and David Thesmar -- Revise & Resubmit. Quarterly Journal of Economics

Charles River Associates Award for Best Paper on Corporate Finance (WFA 2024)

Abstract: Since 1967, all French firms with more than 100 employees have been required to share a fraction of their excess profits with their employees. Through this scheme, firms with excess profits distribute, on average, 10.5% of their pre-tax income to workers. In 1990, the eligibility threshold was reduced to 50 employees. We exploit this regulatory change to identify the effects of mandated profit-sharing on firms and their employees. The cost of mandated profit-sharing for firms is evident in the significant bunching at the 100-employee threshold observed prior to the reform, which completely disappears post-reform. Using a difference-in-difference strategy, we find that, at the firm level, mandated profit-sharing (a) increases the labor share by 1.8 percentage points, (b) reduces the profit share by 1.4 percentage points, and (c) has no significant effect on investment and productivity. At the employee level, mandated profit-sharing increases low-skill workers' total compensation and leaves high-skill workers' total compensation unchanged. Overall, mandated profit-sharing redistributes excess profits to lower-skill workers in the firm without generating significant distortions or productivity effects. 

Policy brief (in French), Financial Times, VoxTalks, Vox Column


With Francis Kramarz and Thomas Delemotte

Quantitative Economics (2022) -- Part of the Global Repository of Income Dynamics Project

Abstract: This paper provides new stylized facts about labor earnings inequality and dynamics in France for the period 1991-2016. Using Linked Employer-Employee Data, we show that (i) Labor inequality in France is low compared to other developed countries and has been decreasing until the financial crisis of 2009 and increasing since then. (ii) Women experienced high earnings growth, in particular at the bottom of the distribution, in contrast to the stability observed for men. Both result from a decrease in labor costs at the minimum wage and an increase in the hourly minimum in the aftermath of the 35h workweek policy. (iii) Top earnings (top 5 and 1\%) grew moderately while very top earnings (top 0.1 and 0.01\%) experienced a much higher growth. (iv) Inequality between and within cohorts follow the same U-shaped pattern as global inequality: it decreased before 2009 and then increased until 2016. (v) Individual earnings mobility is stable between 1991 and 2016, and very low at the top of the distribution. (vi) The distribution of earnings growth is negatively skewed, leptokurtic, and varies with age. Then, studying earnings dispersion both within and between territories, we document strong differences across cities as well as between urban and rural areas, even after controlling for observable characteristics. We also observe a continuous decrease in earnings inequality between territories. However, a larger inflation in rural territories mitigates this convergence. Finally, we document a strong reduction in inequality within rural and remote territories, again driven by changes at the bottom of the wage distribution.

Selected Work in Progress

With Pauline Carry, Claire Montialoux, Alexandra Roulet and Nina Roussille

With Marco Tabellini and Clémence Tricaud