LEHMANN Etienne

This thesis is in the fields of public economics and political economy and is structured around two axes. The first and second chapters focus on redistributive policies. Specifically, they present contributions to income tax theory and adopt both a normative and a political perspective. The third and fourth chapters contribute to a better understanding of the political forces guiding reforms in multistate unions such as the European Union. They focus on the preferences of individuals who are of great importance in the decision-making process but about whom we have little direct information: politicians.My first and second chapters seek to enrich a standard model of optimal taxation, in order to better account for institutional and social contexts. Chapter 1 addresses the question of how to design a tax system when the ties between individuals are taken into account. Indeed, until now, income taxation theory has always focused on redistribution between separate individuals (or couples). But in many contexts, individuals are linked to their family, friends, village or community members, and make regular transfers to them. These transfers go from the richest to the poorest, and thus represent a form of informal redistribution. My research question is: How should the existence of these informal but redistributive transfers affect the design of taxation systems? Chapter 2 examines a salient feature of many developed countries: the large proportion of the population that does not pay income tax. Using tools from the normative tax literature that we apply to a political economy framework, we study the political economy of nonlinear tax reforms, which helps us understand why such a large share of the population is exempt from paying income tax in some countries. Although both chapters are theoretical, I use administrative and survey data to illustrate and draw concrete conclusions from my models.The last two chapters of my dissertation focus on the preferences of French and German parliamentarians on different European integration measures and are based on a first wave of questionnaire surveys conducted in 2016. In the future, we plan to continue these surveys on a regular basis in order to better understand the dynamics of the European Union and to provide an academic perspective to current EU debates with insights. The third and fourth Chapters thus explore MEPs' views on policies that, in light of the current debates and the past ten years, are of particular importance: labor market policies and European monetary union. They offer a new approach to questions of political economy by focusing on the views of a set of important actors in the decision-making process: politicians, for whom, apart from their public votes and statements, we have little direct information. In these chapters, we seek to disentangle which of the two factors is more important in the observed differences: cultural or ideological? Surprisingly, we find that for a majority of questions, the answers reflect an ideological rather than a Franco-German divide. For example, the creation of a common unemployment insurance and greater flexibility in the labor market point to a much more ideological than national divide. These results may help to highlight potential directions for European integration that could prove fruitful.

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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.

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This thesis consists of three chapters that concern household taxation. The first chapter studies the impact of the frequency of taxation and more specifically the welfare gains associated with the shift from an annual to a monthly taxation system. The second chapter studies the tax optimization behaviors of cohabiting couples via the optimal allocation of children on tax forms. The third chapter aims at assessing the impact on the taxable base of the double lowering of the ceiling of the family allowance that took place in 2012 and 2013.

Mobility has become an important issue and a major objective of public policies for poor households. Research has largely shown that the populations furthest from employment are also furthest from a purely spatial point of view. Often located far from employment areas and experiencing greater financial insecurity, the poorest people have more difficulty finding a job, getting to their place of work, accessing public services or local amenities. Some of the literature has sought to explain this spatial segregation, while others have sought to show its negative consequences and the vicious circles in which it traps poverty. This thesis aims to shed specific light on the mobility assistance provided to disadvantaged households. These aids have been developed in France mainly since the 1990s. Although they take different forms, they have the same objective: to promote the spatial mobility of poor households by facilitating access to individual or collective transport. Their implementation is essentially local. Few studies have attempted to measure the consequences of the development of these subsidies. This thesis aims to shed some light on this point. First, we propose a study of the development of these aids since the 1980s and especially the 1990s, starting with a national impulse, but with very varied local applications. We seek to measure the extent to which these aids have been able to interact with the national welfare system as well as with other local aids provided by the different communities. We show that these aids may have contributed to reinforcing threshold effects and poverty traps that were specific to the RMI mechanism and that led to its replacement by the RSA. We also show that this major reform of national welfare has had a knock-on effect on local welfare, and specifically on transport benefits. The second chapter focuses on an aspect ignored in chapter 1, that of non-use of social assistance. The originality of our work is to focus on a specific form of transport assistance (the Forfait Gratuité Transport in the Île de France region) and to study non-use of this assistance by integrating a double spatial dimension: first, the distance between recipients and the public transport network, which is likely to explain lower use. The second is the influence of the geographical environment and, in particular, of diffusion effects on awareness of and demand for such assistance. The last two chapters propose experimental evaluations of mobility aids aimed at young dropouts who have left the school system and are neither in training nor in employment. For these young people, mobility is central to their hopes of professional and social integration. We first evaluate sixteen different actions proposed by different actors to promote mobility and show a positive effect, although it is contrasted: low intensity aids have less effect than more intense aids. This observation is largely confirmed in the fourth chapter, which evaluates the Voluntary Military Service experiment. The young people selected receive general and vocational training as well as preparation for their driver's license. This extremely intense program, in which the young people are supervised by military personnel, yields impressive results in terms of professional integration and, above all, in obtaining a driver's license. In order for mobility assistance policies to be effective, both in terms of mobility and integration, we can conclude that it is better to concentrate resources on the most vulnerable.

This thesis focuses on the monetary incentives to work and to R&D in the French socio-fiscal system, their evolution and their effects. We first simulate the incentives to work more (intensive margin) and to return to work (extensive margin) for the entire French population, taking into account all taxes on labor income and means-tested benefits. We show that incentives have increased at the bottom of the distribution since 1998 as a result of reforms in the 2000s, and that marginal tax rates have shifted from a U-shape according to income levels to a tilde shape. Then, we assess individuals' behavioral responses to these work incentives from social and tax reforms between 2006 and 2015. We show that the effects of marginal rates on labor income are relatively small overall but highly heterogeneous across individual characteristics. The responses would be stronger for income tax reforms than for reforms on social benefits. Finally, we study subsidies and tax incentives for R&D (research tax credit and lower contributions for young innovative firms). We show that R&D subsidy rates increased the most in the 2000s for small firms. For these firms, we evaluate the effect of the strong increase in R&D subsidies on employment devoted to R&D activities. This effect would have been positive and increasing between 2004 and 2010, but less than the increase in aid received between 2008 and 2010.

This thesis focuses on the policy choices of local governments, such as municipalities, that face high mobility of capital, residents, and workers. The literature on tax competition has paid very limited attention to this high mobility of economic agents at the local level. Household mobility has mostly been ignored. No unified model takes into account the mobility of capital, residents and workers. The research question of our thesis is: How do competing local governments in an urban agglomeration, faced with high mobility of capital, residents and workers, choose their various public policy instruments? It is of theoretical interest because it highlights the gaps in our knowledge of local government. It is also of empirical interest because the fiscal, socio-demographic, economic, and political data at the municipal level are among the most accessible.Our thesis can provide a better theoretical foundation for future theoretical work and help pave the way for new approaches to studying local government choices.

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This article proposes to discuss the advisability of reforming the architecture of our system of compulsory levies and policies to support low incomes from work. It argues for the eventual convergence of the different systems currently in force towards a single scale on earned income. We are thinking here of the Income Tax (IR), including its discount and the Employment Bonus (PPE) that it includes, the "activity component" of the Active Solidarity Income (RSA), the Activity Bonus (PA) that will replace the PPE and the RSA-activity as of January 1, 2016, the Generalized Social Contribution (CSG), the Contribution to the Repayment of the Social Debt (CRDS) and even certain social contributions.

This article examines unemployment disparities and efficiency in a duocentric city where workers are non-uniformly distributed between the two job centers. We introduce commuting costs and search-matching frictions to deal with the spatial mismatch between workers and firms. In a decentralized economy job-seekers do not internalize a composition externality they impose on all the unemployed. With symmetric job centers, a change in the distribution of the workforce can lead to asymmetric equilibrium outcomes. We calibrate the model for Los Angeles and Chicago Metropolitan Statistical Areas. Simulations suggest that changes in the workforce distribution have non-negligible effects on unemployment rates, wages, and net output, but cannot be the unique explanation of a substantial mismatch problem.

France, like all developed countries with a market economy, has an elaborate and complex tax system made up of a large number of mandatory levies. In determining its tax policy, the legislator pursues several objectives. These objectives include efficiency and equity. These tax objectives obey different logics, and can sometimes be contradictory. Does the French tax system succeed in achieving these objectives? Various concepts and situations - for example tax niches and tax optimization - studied in the French case but also in an international comparative perspective, by analyzing several types of taxes, will shed light on how tax policies position themselves with respect to equity and efficiency, and make recommendations to optimally resolve the dilemma between efficiency and equity of compulsory levies.

This paper reassesses whether the optimal income tax program features an Earned Income Tax Credit (EITC) or a Negative Income Tax (NIT) at the bottom of the income distribution, in the presence of unemployment and wage responses to taxation. The paper makes two key contributions. First, it derives a sufficient statistics optimal tax formula in a general model that incorporates unemployment and endogenous wages. This formula nests a broad variety of structures of the labor market, such as competitive models with fixed or flexible wages and models with matching frictions. Our results show that the sufficient statistics to be estimated are: the macro employment response with respect to taxation and the micro and macro participation responses with respect to taxation. We show that an EITC-like policy is optimal provided that the welfare weight on the working poor is larger than the ratio of the micro participation elasticity to the macro participation elasticity. The second contribution is to estimate the sufficient statistics that are inputs to the optimal tax formula using a standard quasi-experimental research design. We estimate these reduced-form parameters using policy variation in tax liabilities stemming from the U.S. tax and transfer system for over 20 years. Using our empirical estimates, we implement our sufficient statistics formula and show that the optimal tax at the bottom more closely resembles an NIT relative to the case where unemployment and wage responses are not taken into account.

This article proposes to discuss the advisability of reforming the architecture of our system of compulsory levies and policies to support low incomes from work. It argues for the eventual convergence of the different systems currently in force towards a single scale on earned income. We are thinking here of the Income Tax (IR), including its discount and the Employment Bonus (PPE) that it includes, the "activity component" of the Active Solidarity Income (RSA), the Activity Bonus (PA) that will replace the PPE and the RSA-activity as of January 1, 2016, the Generalized Social Contribution (CSG), the Contribution to the Repayment of the Social Debt (CRDS) and even certain social contributions.

In this paper, we argue that, for a given overall level of labour income taxation, a more progressive tax schedule increases employment. From a theoretical point of view, higher progressivity increases overall employment through a wage moderating effect and also because employment of low-paid workers is more elastic to wages. We test these theoretical predictions on a panel of 21 OECD countries over 1998–2008. Controlling for the burden of taxation at the average wage, our estimates suggest that a more progressive tax schedule reduces the unemployment rate and increases the employment rate. These findings are confirmed when we account for the potential endogeneity of both average taxation and progressivity. Overall, our results suggest that policy-makers should not only focus on the detrimental effects of tax progressivity on in-work effort, but also consider the employment-enhancing effects.

This thesis begins, in theory, with the informativeness of signals when information is imperfect, followed by applications to credit and labor markets. In chapter 2 we show that the Blackwell criterion can imply the dispersion of conditional expectations - the "supermodular dispersion" criterion proposed by Ganuza and Penalva (2010) - only when the signal is binary. Links between the dispersion of conditional expectations and the Persico criterion can be constructed but with strong restrictions. In Chapter 3, we consider a lender-borrower relationship where borrowers can choose to disclose information by paying a nontrivial cost. The decision to disclose information is endogenous. We show that there are only opaque (transparent) equilibria when the risk-free interest rate is low (high) enough. There are multiple equilibria when the interest rate is intermediate and a credit crunch may result. The model is then extended to an OLG setting and we show that the market can converge to either an opaque or transparent steady state, and can have permanent oscillations between different states for certain parameter configurations. In Chapter 4, we study the impact of hiring discrimination on the skills of workers' investment decision in a directed search model. Either the discriminated group or the favored group may underinvest in skills at equilibrium. Whenever one group of workers underinvests, the other group remains highly skilled and the firms' profit is lower relative to the level in the economy where discrimination is absent.

We take the wage announcement approach with job search to study three problems in the labor market. The first problem concerns the premature termination of workers. Such premature work stoppage creates turnover risks for firms, so firms want to offer wage profiles to minimize these risks. In this problem, asymmetric information plays an important role. We adopt a mechanism design approach and consider the different timings at which private information is realized. In a follow-up paper, we propose a specific Age policy by which this inefficiency can be mitigated, and study its implication on welfare and aggregate output. In the second problem, we revisit the welfare analysis of the impact of discrimination on skill choice under a multidimensional hiring standard along characteristics that are either productivity-related or productivity-independent. We show how strategic skill investment between the favored and discriminated group arises. We also compare two wage determination mechanisms (advertised and negotiated wage) to check the robustness of results. In the third problem, we consider the extent to which the unemployment benefit and the minimum wage can correct inefficient allocations arising from the market power of firms. Our context concerns small markets where the ratio of workers to firms is not large. The market imperfection arises from the fact that in the small-scale labor market firms pay less than the competitive wage level. We proceed from an industrial organization point of view, and propose focusing on the misallocation of employment and surplus when analyzing the effectiveness of the policy instrument.

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We investigate how potential tax-driven migrations modify the Mirrlees income tax schedule when two countries play Nash. The social objective is the maximin and preferences are quasi-linear in consumption. Individuals differ both in skills and migration costs, which are continuously distributed. We derive the optimal marginal income tax rates at the equilibrium, extending the Diamond-Saez formula. We show that the level and the slope of the semi-elasticity of migration (on which we lack empirical evidence) are crucial to derive the shape of optimal marginal income tax. JEL Codes: D82, H21, H87, F22.

The coexistence of three massive labor cost reduction schemes, the general exemptions from employer contributions, the Tax Credit for Competitiveness and Employment, and the "responsibility pact" whose implementation was announced at the beginning of 2014, is not a guarantee of legibility, simplicity and coherence. The purpose of this article, is to propose the main lines of a flat review of all these devices. We draw on the lessons of experience, through the history of social levies and exemptions. We also draw on the lessons of economic theory, from classical arguments to those of matching models and applied econometric studies. We argue for a reinforcement of the progressivity of social levies, i.e. to concentrate exemptions on the lowest wages.

We study optimal income taxation when labor supply reacts along the intensive and extensive margins. Individuals are heterogeneous across two unobserved dimensions: their skill and disutility of participation. We develop a new method to analytically derive conditions under which optimal marginal tax rates are non-negative everywhere. It is typically optimal to provide a distinct level of transfer to the non-employed and to workers with negligible earnings. Numerical simulations illustrate these properties for the US. We also apply our method to sign output distortions in other adverse selection frameworks with random participation, namely the monopoly nonlinear pricing and the regulatory monopoly problems.

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This paper characterizes the optimal redistributive tax schedule in a search–matching framework where (voluntary) nonparticipation and (involuntary) unemployment are endogenous and wages are determined by proportional bargaining à la Kalai. The optimal employment tax rate is given by an inverse elasticity rule. This rule depends on the global response of the employment rate, which depends not only on the participation (labor supply) responses, but also on the vacancy posting (labor demand) responses and on the product of these two responses. For plausible values of the parameters, our matching environment induces much lower employment tax rates than the usual competitive model with endogenous participation only. However, optimal employment tax rates are larger (in absolute value) when a given level of the global elasticity of employment is more due to search frictions and less due to participation responses.

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This paper argues that, for a given overall level of labour income taxation, a more progressive tax schedule reduces the unemployment rate and increases the employment rate. From a theoretical point of view, higher progressivity induces a wage-moderation e ect and increases overall employment since employment of low-paid workers is more responsive. We test these theoretical predictions on a panel of 21 OECD countries over 1998-2008. Controlling for the burden of taxation at the average wage, we show that a more progressive taxation reduces the unemployment rate and increases the employment rate. These ndings are con rmed when we account for the potential endogeneity of both average taxation and progressivity. Overall our results suggest that policy-makers should not only focus on the detrimental e ects of tax progressivity on in-work e ort.

We investigate how potential tax-driven migrations modify the Mirrlees income tax schedule when two countries play Nash. The social objective is the maximin and preferences are quasilinear in income. Individuals differ both in skills and migration costs, which are continuously distributed. We derive the optimal marginal income tax rates at the equilibrium, extending the Diamond-Saez formula. The theory and numerical simulations on the US case show that the level and the slope of the semi-elasticity of migration on which we lack empirical evidence are crucial to derive the shape of optimal marginal income tax. Our simulations show that potential migrations result in a welfare drop between 0.4% and 5.3% for the worst-off and an average gain between 18.9% and 29.3% for the top 1%.

This thesis is an applied study of optimal taxation and income risk in Latin America, with a focus on Argentina, Chile, Colombia and Mexico. Faced with high levels of income inequality, income taxes are an essential redistributive tool for Latin America that, until now, has not been fully exploited. One of the objectives of this thesis is to see how far these countries are at their optimal level of taxation in order to explore the capacity for improvement that this type of burden may have in each of the countries in the study. Income risk is another important characteristic of developing economies such as those found in Latin America. Given their vulnerability to external macroeconomic shocks, these economies tend to be particularly volatile. Under these conditions, individuals in Latin America are subject to higher income risks than individuals in developed countries. The presence of risk has an effect on how agents respond to various changes in the economy. Therefore, the study of risk levels and in particular how riskier incomes affect optimal taxation is one of the pillars of this thesis. Income risk can be decomposed into two elements, permanent and transitory. The last part of this thesis is devoted to assessing to what extent the income risk in each country is caused by a permanent or a transitory component.

The high persistence of unemployment in several European countries has led to a shift in the debate on the performance of labor markets from the role of institutional rigidities to other areas of interest. The credit market and entrepreneurship are among them. The objective of this thesis is to contribute to the literature on the determinants of structural unemployment by studying on the one hand the interaction between labor and credit markets and on the other hand the interaction between entrepreneurship and unemployment. In the first part, we assess the impact of credit constraints on the level and persistence of unemployment. To do so, we develop a matching model in which we introduce credit constraints. We show that credit market imperfections increase the level of unemployment and slow down the transitory dynamics. We then test our theoretical predictions on a panel of 20 OECD countries over the period 1982-2003. Our empirical results suggest that credit constraints would significantly increase the level and persistence of unemployment. In a second part, we introduce the choice of occupation in a matching model with credit constraints. Individuals differ with respect to their entrepreneurial capacity and initial wealth. They choose their occupation in order to maximize their earnings. We show that the social optimum can never be decentralized when the credit market becomes constrained. On the one hand, credit constraints induce some talented but poor individuals to become job seekers. On the other hand, some rich but untalented individuals find it profitable to become entrepreneurs, which is another source of inefficiency. An individual's choice of occupation will depend on the tightness of the labor market and the level of constraints in the credit market. We show that when unemployment increases, the entrepreneurial reserve capacity decreases and more individuals have an incentive to become entrepreneurs because of worsening labor market conditions. Similarly, when the number of entrepreneurs increases in the economy, there is more job creation, which increases the number of vacancies and lowers unemployment. Finally, we empirically test these two theoretical predictions to determine what causal links govern the relationship between unemployment and entrepreneurship. Our results confirm the existence of two distinct relationships between entrepreneurship and unemployment operating in opposite directions.

European employment summits emphasize that reducing unemployment requires reform of national employment policy. More than a third of the European Union's budget is devoted to its regional policy. European housing policies tend to favour access to home ownership. At first glance, these observations seem disconnected. Are they really? The aim of the thesis is to draw the attention of policy makers to both the importance of the geographical dimension of unemployment and the interaction between European labor and housing markets. Drawing on recent theoretical developments in labor economics, we answer the following two main questions: What determines regional unemployment differentials? What is the impact of residential status on workers' decisions and on labor market performance? The first part of the thesis is devoted to exploring the regional dimension of the labor market. We show that the restriction of interregional labor mobility as well as the "regional" heterogeneity of workers do explain the unemployment differential between two almost similar regions. A permanent regional productivity shock (simulated) leads to a reduction in unemployment in the prosperous region and a worsening of unemployment in the economically depressed region. In the second part of the thesis, we focus on the importance of residential status in workers' acceptance strategies. We find that homeowners favor job offers located near their homes and because of the very high transaction costs. Second, we consider an economy where homeowners have longer employment durations and shorter unemployment durations than renters. We find through an appropriate numerical simulation that an increase in home ownership improves labor market performance.

This thesis contributes to the growing literature on the interaction between pro-competitive policies and employment. Deregulation policy is employment-enhancing whether the bargaining is collective or individual, whether capital is present or absent in the analysis, and whether competition is monopolistic or oligopolistic. This is because the deregulation of goods markets allows for a fall in prices, which is reflected in an increase in aggregate demand to which firms respond by increasing their production and thus their demand for employment. In the presence of capital, this policy has a positive effect on employment, which is all the more marked when negotiations are individual and the economy is initially uncompetitive. On the other hand, it results in greater employment gains when negotiations are collective and the economy is fairly competitive. This is due to the "hold-up" phenomenon, which is more important in the context of collective bargaining when firms face little competition. Furthermore, we show that the policy of deregulating the goods market has a more positive impact on employment when the financial and labor markets are themselves deregulated. Moreover, the decrease in employment at the micro level is counterbalanced at the macro level by the creation of jobs by new firms entering the market as a result of the pro-competitive policy. This model also allows us to explain the reluctance of low-wage workers in the face of deregulation policy.

In the current context of the development of part-time work, the clear desire to engage in part-time work raises questions on the part of managers about the quality of the link between the employee and the company that employs him. The problematic of this research lies in the analysis of the influence of part-time work on organizational commitment. The conceptual development traces the state of knowledge on the context of the development of part-time work, the comparison of attitudes and behaviors of part-timers and full-timers, the change in attitudes and behaviors following a work time arrangement, the work-out relationship and the effects of organizational support policies on organizational commitment. The experimental empirical research of the before-and-after type (119 employees) proposes an analysis of the motivation and involvement profiles before the switch to part-time work and of the changes that occurred over the period, as well as numerous relationships of the variables of attitude change. On the one hand, this study offers a two-period validation of scales never before used in France. The main methodological contribution is the use of a method of synthetic measurement of change, as well as a confirmatory factorial analysis procedure of change. On the other hand, this research contributes to a better knowledge of the motivations towards part-time work, of their follow-up and of their effects on organizational commitment. It assesses the mechanisms and process of change in involvement by analyzing numerous relationships of attitudinal change variables.