Abstract: How do wages and labor market transitions vary with labor market concentration? Using comprehensive French employer-employee data, I show that wages increase – contrary to what has been shown in other countries – and transition rates decrease when concentration increases. These results are found in the raw data, in regressions at the labor market level, in panel data regressions and in an event study setting in which I focus on markets undergoing large increase in concentration. I then propose a simple model of search-and-matching with a discrete number of firms, optimal vacancy posting and a fixed cost of entry. My model replicates my main two empirical findings: (1) when the entry cost increases, only the most productive firms enter, the market is more concentrated, wages are higher, and transition rates are lower; (2) given a labor market, an increase in productivity at one large firm increases wages at all firms through the increase in output at that firm and in outside option at all other firms, increases transition rates towards that firm, and reduces them towards all other firms. I quantify the markdowns on wages and show they are always relatively small. I investigate the first-best solution in which a planner chooses the distribution of workers across firms to maximize output: the planner concentrates employment among most productive firms, it increases output, mean wage, and total income to workers despite increasing concentration and unemployment. I turn to second-best implementations using individual tax and subsidy rates. By fully taxing most firms - the unproductive ones -, taxing partially the least productive firms among the operating ones, and using the tax revenue collected to subsidize the most productive firms, a planner almost achieves the first-best solution. On the contrary, simple linear tax policies do no come anywhere close to the first-best solution.
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.