Publications by PSE researchers

La réforme du salaire journalier de référence est entrée en vigueur le 1er octobre 2021 dans le cadre d’une refonte globale de l’Assurance chômage en France. Pour les demandeurs d’emploi ayant alterné périodes travaillées et de non-travaillées avant d’accéder à une indemnisation, cette réforme allonge la durée maximale des allocations chômage tout en en réduisant le montant. Cette étude évalue l’impact de cette réforme sur les trajectoires professionnelles, en tenant compte de l’exposition hétérogène des individus à la réforme. Celle-ci dépend directement du temps passé sans emploi entre le premier et le dernier jour travaillé au cours des deux dernières années.

Is Migration Good for the Public Finances.

We study the effects of the SRU law introduced in France in December 2000 to support scattered development of public housing in cities and favor social mixity. This law imposes 20% of public dwellings to all medium and large municipalities of large-enough cities, with fees for those not abiding by the law. Using exhaustive fiscal data, we evaluate the effects of the law over the 1996-2008 period using a difference-in-differences approach at the municipality and neighborhood levels. We find that the law stimulated public housing construction in treated municipalities, but only slightly increased the presence of low-income households. Indeed, new public dwellings enter categories to which medium-income are eligible and most additional occupants are not poor. Within municipalities, the policy decreased public housing segregation but it barely decreased low-income segregation. This comes from local authorities increasing over time the presence of public dwellings in neighborhoods away from existing public housing but in places concentrating low-income households.

We explore empirically the impact of the market sharing collusive practices that were implemented in the French public transportation industry between 1994 and 1999. We build a structural model of bidding markets where innovating firms compete for the market and have the ability to spread the benefits of their innovation through all markets on which they are active. Each local competitive environment shapes the distribution of the prices (the bids) paid by public authorities to transport operators. We recover empirically the distribution of prices and innovation shocks and we show that collusive practices had overall a limited impact on prices. Firms were in reality more interested in avoiding significant financial risks inherent to the activity, as well as the high cost of preparing a tender proposal. As a by-product, we perform a counterfactual analysis that allows us to simulate how an increase in firms' innovation reduces prices significantly.

We study a large market model of dynamic matching with no monetary transfers and a continuum of agents who have to be assigned items at each date. When the social planner can only elicit ordinal agents' preferences, we prove that under a mild regularity assumption, incentive compatible and ordinally efficient allocation rules coincide with spot mechanisms. The latter specify “virtual prices” for items at each date and, for each agent, randomly select a budget of virtual money at the beginning of time. When the social planner can elicit cardinal preferences, we prove that under a similar regularity assumption, incentive compatible and Pareto efficient mechanisms coincide with spot menu of random budgets mechanisms. These are similar to spot mechanisms except that, at the beginning of time, each agent chooses within a menu, a distribution over budget of virtual money.

This paper introduces an internal capital market into a two-factor model of multi-segment firms. It features empire building by managers and informational frictions within the organization. The headquarters knows less about a segment’s true cost than its divisional managers do, so managers can over-report their costs and receive more capital than optimal. Our novel theory, which enables us to endogenize the cost structure of multi-segment firms, shows that international trade imposes discipline on divisional managers and improves the capital allocation between divisions, thereby lowering the conglomerate discount. The theory can explain why exporters exhibit a lower conglomerate discount than non-exporters. We exploit the China shock as an exogenous change to competition to confirm the model’s predictions with data on US companies.

This paper analyzes the implications of attrition for the internal and external validity of the results of four randomized experiments and proposes a new method to correct for attrition bias. We find that not including those found during the intensive tracking can lead to a substantial overestimation or underestimation of the intention-to-treat effects, even when attrition without such tracking is balanced. We propose to correct for attrition using inverse probability weighting with estimates of weights that exploit the similarities between missing individuals and those found during an intensive tracking phase.

This paper offers a new approach to measuring the size of the informal economy based on VAT data for the European Union. Although data intensive, our evading value added duty economy (EVADE) measure is simpler and more transparent than existing measures. EVADE also shows more variation across countries of Europe than earlier measures, including higher informality in Greece, Italy, and Spain, for example. Moreover, we find considerably higher variation within countries across time; in a cross-country time series regression, controlling for tax rates, we confirm that the informal economy grows significantly in recessions and decreases in booms, which we term the “Hugo effect”.

We explore the consequences of the development of home working for wages, hours worked and employee health in the post COVID era. We base our research strategy on a French law passed in 2017 to encourage telework agreements between employers and employees. In the months following the law, many establishments signed telework agreements, and we show that this subsequently led to a much greater development of home working in these establishments after the epidemic shock in 2020. This increase was particularly significant in mid-level occupations, and was followed by a deterioration in the health of the employees concerned, particularly men.

Workers who are worried about their personal finances may find it hard to focus at work. If so, reducing financial concerns could increase productivity. We test this hypothesis in a sample of low-income Indian piece-rate manufacturing workers. We stagger when wages are paid out: some workers are paid earlier and receive a cash infusion while others remain liquidity constrained. The cash infusion leads workers to reduce their financial concerns by immediately paying off debts and buying household essentials. Subsequently, they become more productive at work: their output increases by 7% (0.11 std. dev.), and they make fewer costly, unintentional mistakes. Workers with more cash on hand thus not only work faster but also more attentively, suggesting improved cognition. These effects are concentrated among more financially constrained workers. We argue that mechanisms such as gift exchange or nutrition cannot account for our results. Instead, our findings suggest that financial strain, at least partly through psychological channels, has the potential to reduce earnings exactly when money is most needed.

Via peer-to-peer lending, notaries mobilized immense amounts of capital in France up into the 1930s. They did so despite a thriving stock market, widespread banking with branches, and the existence of an effective lender of last resort. Using detailed evidence on their careers and their businesses, we analyze their training, their successes and failures, how they were regulated, and how they dealt with political and economic crises. What we uncover teaches broader lessons about the misconceptions surrounding modernization, financial development, and the reputational models that economists rely upon to explain informal dealings.