Abstract: How do wages and worker flows vary with labor-market concentration? Using comprehensive French administrative employer-employee data, I document that wages are 6.9% higher in high-concentration markets-contrary to much of the literature-while job-to-job transitions are lower. These patterns hold in the raw data, in market-level and panel regressions, and around large concentration increases. To interpret them, I develop a search-and-matching model with a discrete number of multi-worker firms and an endogenous operating margin. Increasing operating costs reduces the number of active firms and raises concentration, weakening workers’ outside options. Yet it also induces selection: low-productivity firms exit, raising average employer quality and strengthening outside options. In the estimation, selection dominates, so mean wages rise with concentration. I characterize the planner’s allocation and show that too many unproductive firms operate. Efficiency cannot generally be restored. Quantitatively, a policy taxing out low-productivity firms restores most efficiency.
Abstract: This paper studies the efficiency of firm's entry in the labor market. We use a standard DMP framework to which we add a free-entry condition based on the expected value of a vacancy, instead of the usual free-entry condition type-by-type. We show that, even under the Hosios condition, the decentralized equilibrium is inefficient in the steady state, as the entry threshold is too low in the decentralized market. Unproductive firms crowd the vacancy market. This leads to higher tightness and lower expected surplus, and lower mass of firms drawing productivity in the first place. In the steady state, a simple output tax restores efficiency and increases total output by 0.3%. With aggregate productivity fluctuations, the output tax is almost sufficient to restore efficiency, and output increases by an average of 0.4%. The planner should complement it with subsidies for low productivity matches in bad times to avoid endogenous match destruction, although the scope and magnitude of subsidies should be limited. Wages increase substantially, and earnings inequality decrease when introducing the output tax.
with Cesar Zambrano
with Nikki Vercauteren, Amandine Kaiser, Bérangère Dubrulle and Davide Faranda
Abstract: We study the hydrodynamic equilibrium properties of the stably stratified atmospheric boundary layer from measurements obtained in the Snow-Horizontal Array Turbulence Study campaign at the Plaine Morte Glacier in the Swiss Alps. Our approach is based on a combination of dynamical systems techniques and statistical analysis. The main idea is to measure the deviations from the behavior expected by a turbulent observable when it is close to a transition between different metastable states. We first assess the performance of our method on the Lorenz attractor, then on a turbulent flow. The results show that the method recognizes subtle differences among different stable boundary layer turbulence regimes and may be used to help characterize their transitions.