Publications

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.

Interventions targeting improvements in human capital are often motivated by their potential to break the intergenerational transmission of poverty from parents to children. This study contributes to the thin evidence base on these links by examining outcomes for children of former program beneficiaries of a conditional cash transfer (CCT) program, capitalizing on randomized variation in the timing and CCT’s impact on maternal human capital. We estimate intent-to-treat (ITT) differential effects on early childhood anthropometric and cognitive outcomes for 0–3-year-old children of program beneficiaries [N=366], as well as effects on key domains including nutrition, health, stimulation and the home environment. We find that moderately higher schooling for mothers (19–22 years old) who were the original program beneficiaries did not translate into improvements in anthropometrics or cognitive outcomes for their children. We also find no effects on behaviors commonly thought to be affected by higher education such as investments in nutrition and preventive health, or stimulation. Early program beneficiary mothers, however, had worse mental health outcomes and were more likely to use violent disciplinary practices such as spanking, threatening and punishing. Findings demonstrate the complexity of intergenerational mechanisms across genetic, biological, environmental and behavioral factors, and also suggest the importance of maternal mental health as a mechanism influencing child outcomes.

Emission trading systems are cornerstone policies to reduce carbon emissions. Although economic intuition suggests that broader allowance trading should be welfare improving, this paper proves that view can be wrong. Under an increasingly popular type of emissions trading scheme — tradable performance standards (TPS), multiple narrow markets can decrease emissions relative to a single unified market, so that restricting trade does not always harm welfare. We show analytically that, when intensity benchmarks are heterogeneous within a sector, this result can hold even if the well-known “implicit output subsidy” does not impact total output. Finally, we provide evidence that this concern can be of high practical relevance. Using a general equilibrium model of China’s TPS for 2020–2030, we show that broader trading results in significantly higher emissions (up to 10%), and decreases welfare relative to narrower markets when the social cost of carbon exceeds $91/tCO.

This paper shows that even moderate air pollution levels, such as those in Europe, harm the economy by reducing firm performance. Using monthly firm-level data from France, we estimate the causal impact of fine particulate matter (PM 2.5 ) on sales and worker absenteeism. Leveraging exogenous pollution shocks from local wind direction changes, we find that a 10 percent increase in monthly PM 2.5 exposure reduces firm sales by 0.4 percent on average over the next two months, with sector-specific variation.

Simultaneously, sick leave rises by 1 percent. However, this labor supply reduction explains only a small part of the sales decline. Our evidence suggests that air pollution also reduces worker productivity and dampens local demand. Aligning air quality with WHO guidelines would yield economic benefits on par with the costs of regulation or the health benefits from reduced mortality.

The traditional specialization of men in paid work and women in housework is rooted in the spatial separation of these activities. We examine the possible consequences of the recent expansion of Work from Home (WfH) for the gendered allocation of time. We focus on the time devoted to housework by men and women who work from home versus at the workplace, before and after the Covid pandemic. Using data on several thousand workers drawn from the American Time Use Survey, we find that the gender gap in unpaid work has declined by about 27 minutes per day, i.e. by about 40% for remote workers. Among remote workers, women now spend more time on paid work and less on unpaid work, whereas men do more household chores.

This paper investigates the role played by firms’ managerial skills in the heterogeneous reaction of exporters to common exogenous changes in their international competitiveness (here captured by changes in the real exchange rate). Relying on a simple theoretical framework, we show that firms with better managerial skills have higher profits, market power, and are able to adapt their markup more when faced with a competitiveness shock. We test this prediction relying on detailed firm-product-destination level export data from France for the period 1995-2007 matched with specific information on the firms’ share of managers. Our findings show that managerial intensive firms have larger exporter price elasticity to real exchange rate variations. The effect is not trivial: in the wake of a depreciation, exporters whose management intensity is one standard deviation higher than the average, increase their prices by 51% to 73% more than the average exporter. This finding is robust to controlling for the alternative explanations suggested by the previous literature to explain the heterogeneous pass-through of firms.

The importance of the literature on present bias may have overlooked some other forms of temporal inconsistencies anchored in the smoothing properties of consumption. The article first clarifies how a list of axioms enable the obtention of time-dependent recursive utility functions. The properties of the latters are analysed in light of the well-known present bias but also through a temporal smoothing bias that emerges when two successives selves do no share the same aversion to fluctuations. It is shown that this new concept relates to a time-varying Morishima intertemporal elasticity of substitution. The second part of the article brings an axiomatic construction providing a parametric representation that is aimed at a careful account of future and present bias, how they relate to each other or to substitution mechanisms and is finally concerned with the testable implications of the current framework. The theory is finally applied by considering intertemporal choices with Markovian strategies and temporally consistent solutions. For some parameters configurations, there exists a multiplicity of Nash equilibria, and then an indeterminacy in the agent behaviour.

This paper examines an endogenous growth model that allows us to consider the dynamics and sustainability of debt, pollution, and growth. Debt evolves according to the financing adaptation and mitigation efforts and to the damages caused by pollution. Three types of features are important for our analysis: the technology through the negative effect of pollution on TFP; the fiscal policy; the initial level of pollution and debt with respect to capital. Indeed, if the initial level of pollution is too high, the economy is relegated to an endogenous tipping zone where pollution perpetually increases relatively to capital. If the effect of pollution on TFP is too strong, the economy cannot converge to a stable and sustainable long-run balanced growth path. If the income tax rates are high enough, we can converge to a stable balanced growth path with low pollution and high debt relative to capital. This sustainable equilibrium can even be characterized by higher growth and welfare. This last result underlines the role that tax policy can play in reconciling debt and environmental sustainability.

We investigate the bidirectional relationship between immigration and right-wing populism, which we characterize as a self-reinforcing dynamic process where anti-immigrant rhetoric and populist policies lead to a deterioration in the average education and skill level of immigrants. The deterioration in the ratio of high-skill to low-skill immigrants in turn fuels populist support and anti-immigration attitudes, creating what we call “the vicious circle of xenophobia”. We review some historical and contemporary studies that are suggestive of such vicious circle. In particular, recent cross-country evidence shows that low-skill immigration tends to exacerbate populism, while high-skill immigration tends to mitigate it. Conversely, populist policies and xenophobic attitudes have a strong repulsive effect on highly-skilled immigrants and result in adverse immigrant selection. We use the empirical results from those studies to inform a theoretical model of joint determination of immigrants’ skill-ratio and right-wing populism levels. The model displays multiple equilibria, with the inferior equilibrium – corresponding to our vicious circle — characterized by high levels of right-wing populism and a high proportion of low-skill workers among immigrants. In this framework, structural trends such as internet penetration, economic erosion of the middle class, demographic pressure from poor countries as well as adverse cyclical shocks make the good, efficient equilibrium less likely and the inferior equilibrium of explosive populism and deteriorated immigrants’ skill-ratio more likely.

Wealth inequality dynamics influence economic and social outcomes and stability. While climate change and climate policies affect both physical capital and financial assets, their impacts on aggregate wealth and its distribution remain underexplored. Preliminary calculations suggest that climate change and climate investments could have substantial effects on wealth inequality, although the direction of these changes remains uncertain. This Perspective builds on numerical insights, outlines a conceptual framework and proposes a research agenda aimed at advancing the understanding of global wealth inequality under climate change, highlighting the need for interdisciplinary collaboration on the issue.

Firms receiving independent signals on a common‐value risky project compete to be the first to invest. When firms are symmetric and competition is winner‐take‐all, rents are fully dissipated in equilibrium and the extent to which signals are publicly disclosed is irrelevant for welfare. When disclosure of signals is asymmetric, welfare is highest when firms are most asymmetric, and policies that uniformly promote disclosure may backfire, especially when competition is severe. When firms strategically select their disclosure policies, a moderate subsidy for disclosure induces a low correlation between firms’ policies, and thus maximizes welfare.

This paper examines the diffusion of media slant. We document the influence of Fox News Channel (FNC) on the partisan slant of local newspapers in the U.S. over the years 1995-2008. We measure the political slant of local newspapers by scaling the news article texts to Republicans’ and Democrats’ speeches in Congress. Using channel positioning as an instrument for viewership, we find that higher FNC viewership causes local newspapers to adopt more right-wing slant. The effect emerges gradually, only several years after FNC’s introduction, mirroring the channel’s growing influence on voting behavior. A main driver of the shift in newspaper slant appears to be a change in local political preferences.

This article expands on previous research on gene-environment (GxE) effects on socio-economic status, by stepping beyond the family dimension and exploring how the neighbourhood context interacts with education linked genes in influencing educational achievement. While some evidence suggests that genetic links to education are more fully expressed in high socio-economic status families, other findings indicate that individuals with lower genetic predisposition for education benefit more from high socio-economic contexts. We argue that the neighbourhood environment may also play a role on the relationship between genes and education-related outcomes. We find evidence that living in socioeconomically advantaged neighbourhoods contributes to closing the gap between individuals characterized by high and low genetic predispositions towards educational achievement, with this effect primarily driven by influences on academic motivation, rather than cognitive skills. These findings emphasize that environmental contexts can shape the unfolding of genetic endowment and point to an important role of the neighbourhood in compensating for pre-existing disadvantage, thus contributing to improve chances of upward social mobility and to limit the reproduction of social inequalities in education over time.

The small improvement argument has been said to establish that the standard weak preference or value relation can be incomplete. We first show that the argument is one of three possible ‘small amendment arguments’, each of which would yield the same conclusion. Generalizing the analysis thus, we subsequently present a strong and a weak version of small amendment arguments and derive the exact rationality conditions under which they reveal incompleteness. The results show that the arguments (in any of their variants) need not reveal a problem for the possibility of rational choice. In fact, it can be argued that they only reveal such a problem if the underlying relation is complete rather than incomplete.