DECREUSE Bruno

This thesis explores the implications of technical progress and labor taxation on employment performance in France and the United States over the past four decades. Chapter 1 assesses the extent to which differences in socio-demographic and occupational structures between countries explain the French employment deficit. This deficit reflects not only a deficient labor market, but also a reallocation of work that affects the employment prospects and participation decisions of specific sociodemographic groups. Chapter 2 examines the determinants of unskilled employment performance in France between 1982 and 2008. Technical progress and labor taxation policies are key to understanding the deterioration of unskilled employment. The reallocation of unskilled labor from routine jobs to manual jobs induced by technical progress is partly hindered by the presence of the non-market sector. Labor taxation interacts with technical progress by changing the value of unskilled jobs relative to non-market labor. Chapter 3 studies the implications of routine technology shocks on economic fluctuations between 1989 and 2017 in the United States. It assesses their impact by estimating a structural VAR model. Technology shocks biased against routine tasks explain the recessionary effects of technology shocks on hours worked. These shocks appear quantitatively relevant and generate recognizable business cycle fluctuations.

This thesis studies the frictions that alter the matching processes between labor supply and demand. The matching of aggregate labor supply and demand partly explains employment and wage levels. However, imbalances remain in many labor markets. Despite radical changes such as globalization and the digitalization of job search, these imbalances persist. This thesis is therefore organized around two axes studying the frictions associated with these two important phenomena. The first axis is dedicated to the globalization of the labor market and foreign workers. The first two chapters of this thesis are devoted to this. The first chapter focuses on a friction affecting foreign workers in Germany. It documents how cultural differences with their country of origin lead to a penalty on their wages. The second chapter examines a friction related to employers. It documents the difficulties of American employers in recruiting domestic workers for jobs associated with new technologies. It thus explains, in part, why these employers seek to recruit foreign workers. The second section of the thesis is dedicated to the digitalization of the labor market. The third chapter explores an information friction emanating from the digitalization of the job search. It quantifies the share of obsolete ads online on three of the major US job boards. Thus, it documents a negative externality wasting job seekers' search time and effort.

This thesis assesses the combined effects of cultural values and labor market frictions on individuals' educational choices and unemployment behavior. The first chapter proposes an explanation for social reproduction. I use an overlapping generations model where parents transmit more or less job-friendly values and the child chooses his or her education and seeks a job. The transmission occurs under imperfect information about one's child's academic abilities. In privileged families, parents do not doubt the success of their offspring, and transmit a strong pro-employment value. This mechanism increases social immobility. The second chapter shows how to compute UI in a case where endogenous preferences are represented by an optimal choice of work self-esteem that can be complementary to or substitutable for the wage. By neglecting the endogenous and state-specific nature of self-esteem, a sufficient-statistics approach may wrongly call for an expansion of UI. The third chapter analyzes the relationship between work ethic and the decision to collect unemployment benefits with a job search model in which parents transmit work self-esteem. Increasing unemployment benefits or lowering the cost of claiming increases the probability of receiving benefits, while lowering the cost of job search decreases unemployment and participation rates via an increase in work ethic (for a lower unemployment risk), resulting in a stigma of unemployment.

Young Europeans experience high unemployment rates, job instability, and late emancipation. Meanwhile, they do not support reforms weakening protection on long-term contracts. In this paper, we suggest a possible rationale for such reform distaste. When the rental market is strongly regulated, landlords screen applicants with regard to their ability to pay the rent. Protecting regular jobs offers a second-best technology to sort workers, thereby increasing the rental market size. We provide a model where nonemployed workers demand protected jobs despite unemployment and the share of short-term jobs increases, whereas the individual risk of dismissal is unaffected. Our theory can be extended to alternative risks and markets involving correlated risks and commitment under imperfect information.

In France, numerous empirical studies have highlighted the existence and extent of discrimination against certain demographic groups on the basis of one or more criteria in a particular market. Most of these studies have focused on discrimination in hiring and in access to housing, based on gender, origin and place of residence. In response to these difficulties, many public policy measures have been put in place to remedy them. However, studies aimed at evaluating them on a rigorous basis remain very rare or non-existent. In this doctoral thesis, we are interested in evaluating the effectiveness of three actions to combat discrimination based on gender, origin and place of residence in the fields of employment and housing. In access to private employment (Chapter 1), we examine whether individual entrepreneurship, encouraged by French President Emmanuel Macron during his November 14, 2017, speech on "Politique de la Ville" in Roubaix, is an effective way to circumvent gender, origin, and place of residence discrimination in the labor market. We are interested in entrepreneurship through business takeovers. In access to public employment (Chapter 2), we are interested in evaluating the new actions for equality and diversity in recruitment implemented within the Ministry of National Education since 2014: through the modification of the rules for constituting juries, the sensitization of juries to discrimination, the modification of recruitment modalities, as well as the professionalization of competitive exams, with a reduction in the number of tests, and a change in their content. This last aspect is the main point of the reform of the system of external competitive examinations for the various categories of the Ministry of National Education. We examine the impact of this reform of the professionalization of competitive examinations on the chances of success for candidates who are potentially discriminated against because of their gender or place of residence, as well as on the biases of evaluation on the part of jury members. In access to housing (Chapter 3), we evaluate the effect of an action aiming to reduce discrimination according to origin by means of a letter sent by the Defender of Rights to real estate agencies with a high risk of discrimination.

A recent strand of papers use sharp regression discontinuity designs (RDD) based on age discontinuity to study the impacts of minimum income and unemployment insurance benefit extension policies. This design challenges job search theory, which predicts that such RDD estimates are biased. Owing to market frictions, people below the age threshold account for future eligibility to the policy. This progressively affects their search outcomes as they get closer to entitlement. Comparing them to eligible people leads to biased estimates because both groups of workers are actually treated. We provide a nonstationary job search model and quantify the theoretical biases on the datasets used in the literature. Our results suggest that the employment impact of minimum income policies are (significantly) under-estimated, whereas the impacts of benefit extensions on nonemployment duration are (not significantly) over-estimated.

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This thesis is composed of three articles, each of which asks a question about discrimination. The first article examines whether the inhabitants of Seine-Saint-Denis are statistically discriminated against on the basis of supposed violence . where the practice of a combat sport would be a signal of violence. The second article looks at whether Marseilles accents are discriminated against in the labor market. The last article asks whether employers could use the surname and address of job applicants to correlate their accent and, if they infer that they have an accent from the big cities, to discriminate against them on this point. The "testing" method is used to answer these three questions. The first two testings lead to a negative answer to the first two questions. Regarding the third question, even if it cannot be answered, the third test proves that the accent of the large ensembles is discriminated. Moreover, it shows that discrimination on the patronymic can overshadow that on the address. In general, this work shows that employers do not take sport into account in their hiring practices and that when designing a test, one must distinguish between strong and weak signals. He also shows that testing can be used up to the point where employers contact candidates by phone and engage different stereotypes depending on the accent they hear. Finally, he suggests that policymakers should seek to reduce discrimination based on surname first if they want to reduce total discrimination.

This paper questions the ability of the standard HOS (Heckscher-Ohlin-Samuelson) model to explain changes in the labor shares (LS) of income in OECD countries. We use the Davis (1998) version of the HOS model with wage rigidity in a sub-group of countries. We show that trade openness with developing countries reduces LS in rigid wage countries and does not affect LS in free wage countries. This pattern is induced by factor reallocation towards capital-intensive sectors in rigid wage countries. Using the KLEMS dataset for 8 OECD countries over the period 1970–2005, we show that the weight of capital-intensive sectors substantially increased in continental European countries, while it did not change or even decreased in the US and the UK. Fixed effects regressions suggest that trade intensity with China explains between 50% (IV estimates) and 80% (OLS estimates) of the observed differential labor share change between Continental Europe and Anglo-Saxon countries.

When vacancies are filled, the ads that were posted are generally not withdrawn, creating phantom vacancies. The existence of phantoms implies that older job listings are less likely to represent true vacancies than are younger ones. We assume that job seekers direct their search based on the listing age for otherwise identical listings and so equalize the probability of matching across listing age. Forming a match with a vacancy of age a creates a phantom of age a and thus creates a negative informational externality that affects all vacancies of age a or older. The magnitude of this externality decreases with a. The directed search behavior of job seekers leads them to over-apply to younger listings. We calibrate the model using US labor market data. The contribution of phantoms to overall frictions is large, but, conditional on the existence of phantoms, the social planner cannot improve much on the directed search allocation.

This doctoral thesis studies, within a theoretical framework, the impact of environmental tax policies with respect to worker heterogeneity. It analyzes the construction of tax policies according to three objectives: reducing pollution emissions, improving efficiency, and reducing inequality. This thesis consists of an introduction and three chapters (academic articles), each of which examines this issue from different angles. The first chapter focuses on educational choices and analyzes the impact of environmental taxes on efficiency and equity through these educational choices. The second chapter focuses on the impact of environmental taxes in a context of labor market imperfection (frictional involuntary unemployment). The third chapter focuses on regional disparities in wages, employment and preference for polluting goods.

Searching for partners involves informational persistence that reduces future traders’ matching probability. In this article, traders who are no longer available but who left tracks on the market are called phantoms. We examine a dynamic matching market in which phantoms are a by-product of search activity, no coordination frictions are assumed, and non-phantom traders may lose time trying to match with phantoms. The resulting aggregate matching technology features increasing returns to scale in the short run, but has constant returns to scale in the long run. We embed a generalized version of this matching function in the canonical continuous-time equilibrium search unemployment model. Long-run constant returns to scale imply there is a unique steady state, whereas short-run increasing returns generate excess volatility in the short run and endogenous fluctuations based on self-fulfilling prophecies.

In the US, black workers spend more time in unemployment, lose their jobs more rapidly, and earn lower wages than white workers. This paper quantifies the contributions of statistical discrimination, as portrayed by negative stereotyping and screening discrimination, to such employment and wage dis- parities. We develop an equilibrium search model of statistical discrimination with learning based on Moscarini (2005) and estimate it by indirect inference. We show that statistical discrimination alone cannot simultaneously explain the observed differences in residual wages and monthly job loss probabilities between black and white workers. However, a model with negative stereotyping, larger unemployment valuation and faster learning about the quality of matches for black workers can account for these facts. One implication of our findings is that black workers have larger returns to tenure.

Young Europeans experience high unemployment rates, job instability and late emancipation. Meanwhile they do not support reforms weakening protection on long-term contracts. In this paper, we suggest a possible rationale for such reform distaste. When the rental market is very regulated, landlords screen applicants with regard to their ability to pay the rent. Protecting regular jobs offers a second-best technology to sort workers, thereby increasing the rental market size. We provide a model where non-employed workers demand protected jobs despite unemployment and the share of short-term jobs increase, whereas rents, wages and the individual risk of dismissal are unaffected.

The paper investigates the link between the over-exposure of African immigrants to unemployment in France and their under-representation in jobs in contact with customers. We build a two-sector matching model with ethnic sectorspecifc preferences, economy-wide employer discrimination, and customer discrimination in jobs in contact with customers. The outcomes of the model allow us to build a test of ethnic discrimination in general and customer discrimination in particular. We run the test on French individual data in a cross-section of local labor markets (Employment Areas). Our results show that there is both ethnic and customer discrimination in the French labor market.

The first chapter shows the interdependence in the rental market between procedural formalism (PF) and local social networks. While PF increases the cost of resolving legal disputes between landlords and tenants, social networks have the advantage of being able to resolve a dispute without the courts. PS makes individuals belonging to a social network more attractive to the landlord. The second chapter explains the importance of sunlight on the demand for regulation of the rental market. The sunny countries of southern Europe are attractive because of their mildness of life. This potential immigration increases the tension on the rental market. To reduce this tension, individuals from southern Europe develop a complementarity between local social capital and regulation. This strategy explains a Mediterranean equilibrium where local social capital and PF are high. On the other hand, the lack of attractiveness of countries with little sunshine explains an Anglo-Saxon and Scandinavian equilibrium with opposite characteristics. The third chapter explains the support for labor market regulation by the presence of regulations on the rental market. When the latter is highly regulated, landlords select tenants according to their ability to pay the rent. Protecting open-ended contracts forces firms to select workers and then allows landlords to better estimate the individual risk of layoff. We construct a model where unemployed individuals demand more regulations and protections despite the increase in unemployment and the share of temporary contracts.

The objective underlying the three chapters that make up this thesis is to better understand the impact of public policies whose impacts differ across heterogeneous sectors. We apply this analysis to three types of public policies at the heart of contemporary macroeconomics: (i) environmental policy, (ii) development aid policy and (iii) twin deficit policy. Through these three chapters, we argue that the sectoral impacts of policies play a crucial role in the evaluation of policies and in the determination of the optimal policy. The first chapter focuses on the pollution tax. It provides a theoretical model that explains why there is a negative relationship between household income and their support for the pollution tax. In the second chapter, I study the macroeconomic impacts of a development aid policy and consider two sectors: the tradable goods sector (T-sector) and the non-tradable goods sector (N-sector). I consider two types of foreign aid: (i) aid distributed through lump sum transfers to households and (ii) aid to finance public investments. I study the impact of capital market liberalization on the optimal form and performance of development aid. The third chapter focuses on twin deficits: a current account deficit induced by a balanced budget deficit. The econometric analysis of the paper shows that countries with centralized wage bargaining have smaller twin deficits than others. This chapter also provides a theoretical model to explain these empirical results.

The specificity of the data required to assess national origin discrimination in the labor market makes understanding this phenomenon difficult. In this thesis, we mobilize data from controlled experiments as well as original survey data to contribute to this understanding. After synthesizing existing studies, we attempt to estimate the effects of characteristics overrepresented among individuals of foreign origin on the probability of obtaining a job interview. Two characteristics are specifically examined: religious proximity and employment status. We investigate whether the impact of national origin is conditional on the latter. We then observe whether the possession of a characteristic that signals high productivity reduces discrimination in hiring related to national origin. Finally, we try to take into account the perverse effects that the feeling of having been discriminated against because of their national origin may have on the characteristics and performance of individuals of foreign origin. Their situation on the labor market but also the opinions and performances of their children are analyzed. Our results suggest the presence of statistical discrimination, but also of discrimination linked to preferences. The feeling of having been discriminated against because of one's national origin, whether it is true or not, may have an impact on the unobservable characteristics of individuals of foreign origin and modify the performance of their children. In such a context, increasing the cost of discrimination as well as implementing awareness-raising policies seem necessary.

We address the effects of FDI on the labor share in developing countries. Our theory relies on the impacts of FDI on wage and labor productivity in a frictional labor market. FDI has two opposite effects on the labor share: a negative force originated by technological advance, and a positive force due to increased labor market competition between …firms. We test this theory on aggregate panel data through …fixed effects and IV estimates. We examine the relationship between the labor share in the manufacturing sector and the ratio of FDI stock to GDP. We show that FDI has decreased the labor share in the host countries of our dataset. This impact amounts to between 10% to 20% of the mean labor share in our sample.

In rank-order tournaments, players have incentives to cheat in order to increase their probability of winning the prize. Usually, cheating is seen as a technology that allows individuals to illegally increase their best potential performances. This paper argues that cheating can alternatively be seen as a technology that ensures that the best performances are reached more often. We call this technology recovery doping and show that it yields new insights on the effects of cheating: recovery doping lowers performance uncertainty, thereby changing the outcome of the contest in favour of the best players. We develop this theory in a game with player heterogeneity and performance uncertainty and then study the results of the cross-country skiing World Cup between 1987 and 2006. In line with our theoretical predictions, race-specific rankings were remarkably stable during the 1990s, subsequently becoming more volatile. This pattern reflects the rise and fall of synthetic EPO and the emergence of blood testing and profiling.

Diversity reflects the fact that members of a community differ according to certain characteristics, related to ethnic origin, socio-economic status or culture. The rise of trade and economic integration has presented modern societies with increasing levels of diversity. This thesis assesses the social and economic impact of local diversity. It shows how the diversity of a neighborhood affects the living conditions and employment prospects of its residents. This work contributes to the literature in three ways: it examines unexplored issues at a very local level, reveals underlying mechanisms, and provides new methods for addressing endogeneity. Chapter 1 shows that diversity of origins has a negative effect on the quality of local public goods, due to vandalism related to a lack of peer pressure, and due to the failure of collective action that would enable effective property management. No robust effect on public safety is noted. Chapter 2 reveals that the effect of unemployment on crime has a spatial dimension. For economic crime, unemployment in the surrounding neighborhoods has a stronger effect than in the immediate neighborhood, with the reverse being true for vandalism. Chapter 3 shows that people living in a more diverse neighborhood have lower employment prospects, with this effect related more to the cultural than the ethnic dimension of diversity. Chapter 4 develops a model rationalizing ethnic minorities' use of the informal economy in response to unfavorable labor market conditions.

This paper examines the impact of labor market institutions covering the risk of unemployment on the nature of educational investment. We offer a matching model of unemployment in which individuals of a given education determine the scope (or adaptability) and intensity (or productivity) of their human capital before entering the labor market. Our model features an increasing relationship between match surplus and the return to adaptability skills. This relationship explains why matching frictions promote adaptability skills instead of productivity skills, and why unemployment benefits and job protection create the incentive for productivity skill acquisition.

This paper examines the impact of labor market institutions covering the risk of unemployment on the nature of educational investment. We offer a matching model of unemployment in which individuals of a given education determine the scope (or adaptability) and intensity (or productivity) of their human capital before entering the labor market. Our model features an increasing relationship between match surplus and the return to adaptability skills. This relationship explains why matching frictions promote adaptability skills instead of productivity skills, and why unemployment benefits and job protection create the incentive for productivity skill acquisition.

This doctoral thesis aims to contribute to the debate on the origin of ethnic discrimination, by focusing on the population of African immigrants in France and on that of African-Americans in the United States. Specifically, by analyzing French and American microeconomic data, it identifies the existence of discrimination based on the principle of employer and consumer preferences and their effect on the weakening of the economic situation of these two minority groups. It establishes the importance of indirect discrimination on the part of consumers, and suggests that it is essential to know the origins of ethnic discrimination in order to establish public policies capable of effectively combating this phenomenon. The first chapter offers a descriptive analysis of the access of working people according to their geographical origins to customer-facing jobs in France. It shows that immigrants in France, and African immigrants in particular, have less access to jobs in contact with the public. In order to analyze whether consumers play a role in this underrepresentation, the second chapter formulates a test strategy to distinguish between consumer and employer discrimination. The existence of these two sources of discrimination against African immigrants is then proven through the use of the French population census. Using the previous test strategy, the third chapter reveals the presence of this source of discrimination against African-Americans in the United States.

Education is an investment that finds its return in the labor market, but labor market frictions affect both the level and nature of educational investments. At the same time, the skills acquired during schooling condition the design of labor market institutions.We propose three chapters, each of which examines a particular issue.The first presents a model of labor market mismatch in which the degree of mismatch between workers and jobs is endogenous: it depends on educational efforts (which reduce the mismatch) and technological investments (which increase it). We examine the impact of uncertainty about the future work partner, heterogeneity of workers with respect to their educational ability, and risk aversion.The second constructs a matching model with specialists and generalists in which the proportion of specialists is endogenous. The nature of human capital determines the number of queues in which the worker can prospect and his rank in each queue. Education carries several externalities: specialists promote job creation in each sector . generalists improve the efficiency of matching technology but worsen the coordination problem of firms. We calibrate the model on aggregate data for 20 OECD countries. Self-selection is always inefficient: taxing vocational training could reduce the unemployment rate by more than one percentage point.The third studies the design of unemployment insurance in a context where workers differ in the nature of their human capital. We show that, depending on the scenario chosen for the management of the insurance fund, the proportion of specialists can lead to a decrease or an increase in the replacement rate of the optimal unemployment benefit.

The central theme of this thesis is the impact of globalization and economic development on the sharing of value added between labor and capital incomes in both developing and developed countries. The first chapter focuses on the impact of economic development on the sharing of value added. It highlights the crucial role that the strong duality of the labor market can have in developing countries, where a formal sector, whose size is limited by entry costs and composed of relatively productive firms, coexists with an informal sector composed of less productive firms headed by individuals with low human capital. In such a context, labor market imperfections and frictions have important implications for the sharing of value added insofar as the typical worker is not paid at his marginal productivity and his external opportunities depend on the low-productivity informal sector. The second chapter focuses on the impact of foreign direct investment (FDI) on the sharing of value added in developing countries. The entry of FDI into developing countries corresponds to the meeting of two very different productive technologies in the same labor market. Thus the entry of foreign firms increases the productive heterogeneity of firms in these countries. When the labor market is frictional, this difference in productivity has strong implications for the sharing of value added insofar as the external opportunities of the worker hired by a foreign firm are largely located in local firms that produce relatively less. The impact of exchange rate crises - a recurrent phenomenon in economies that have liberalized their capital markets - on the sharing of value added is then addressed in the third chapter. Exchange rate crises have a very significant cost in terms of production. They also give rise to significant factor reallocations between different sectors of the economy. We examine the extent to which workers' bargaining power may be affected during this particular episode and what the impact of reallocation effects may be on the aggregate wage share. Finally, in the fourth chapter, we discuss the effects of wage rigidities on the sharing of value added in a global environment of factor cost determination. In such an environment, the elasticity of demand for labor is higher than in a closed economy, and wage rigidities lead to factor reallocations towards capital-intensive sectors for the countries that implement them. These reallocations can lead to a sharp fall in the wage share of value added, while increasing the wage share in countries that have not introduced rigidities. This theory can be compared with the very different experiences of continental European and Anglo-Saxon countries in terms of value added sharing.

This thesis analyzes the determinants of exclusion from the labor market. It focuses on the mechanisms of exclusion centered on the unemployability of excluded workers. Three principles guide the reflection: exclusion is a facet of unemployment, individual employability is relative, and the heterogeneity of the workforce is endogenous. The first chapter analyzes the phenomena of discrimination through the prism of the negative time dependence of unemployment exit risks. We distinguish within a unified framework four arguments put forward in the literature: ex ante heterogeneity, the signal related to the duration of unemployment, the demoralization of the long-term unemployed, and the loss of human capital related to the unemployment episode. Chapters 2 and 3 examine a strategic exclusion mechanism. Chapter 2 focuses on the exclusion of low-skilled workers . Chapter 3 on the exclusion of the long-term unemployed. In chapters 4 and 5, the number of firms is endogenous and individuals lose human capital during episodes of unemployment. Chapter 4 focuses on the nature of the training provided by firms, and on the mode of wage bargaining. In chapter 5, aging causes relative losses of human capital. The endogenous growth rate of productivity determines the rate of obsolescence of individual skills. This mechanism leads to the exclusion of older unemployed workers.