# Labor Disputes and Job Flows

Henri Fraisse, Francis Kramarz, Corinne Prost

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Direction des Études et Synthèses Économiques

G 2014 / 13

Labor Disputes and Job Flows

Henri FRAISSE, Francis KRAMARZ
et Corinne PROST

Document de travail

<figure><img src="image_2.png" /></figure>

Institut National de la Statistique et des Études Économiques
INSTITUT NATIONAL DE LA STATISTIQUE ET DES ÉTUDES ÉCONOMIQUES

Série des documents de travail
de la Direction des Études et Synthèses Économiques

G 2014 / 13

Labor Disputes and Job Flows

Henri FRAISSE*, Francis KRAMARZ**
et Corinne PROST***

DÉCEMBRE 2014

The authors are grateful to John Abowd, David Autor, Jed DeVaro, Marc Ferracci, Joop Hartog, Larry Kahn, and Iona Marinescu for useful comments. We also thank seminar participants at the Banque de France, Crest, MIT, New York University, University of Chicago, Yale University as well as participants at the EDHEC-GAIN-ADRES conference, IZA summer school, EALE conference, CPB workshop, and ESSLE conference.

<footnote>* Banque de France and IZA</footnote>

<footnote>** CREST, CEPR and IZA</footnote>

<footnote>*** Département des Études Économiques - Timbre G201 - 15, bd Gabriel Péri - BP 100 - 92244 MALAKOFF CEDEX
CREST</footnote>
# Labor Disputes and Job Flows

## Abstract

This article uses variations in local conditions of the activity of the labor courts to assess the effect of dismissal costs on the labor market. Judicial activity is analyzed using a data set of individual labor disputes brought to French courts over the years 1996 to 2003. Several indicators are computed: the percentage of dismissed workers who litigate in employment tribunals, the fraction of cases leading to a conciliation between parties, to a trial, resulting in a worker's victory.

First, we present a simple theoretical framework helping us understand the links between litigation costs, judicial outcomes and firing costs. Court outcomes are not exogenous to market conditions but also to litigation costs: a large filing rate can come from small litigation costs for the workers, leading to large dismissal costs for the firms; it may well come from small litigation costs for the firms, the employers taking more risks when firing workers.

Second, we regress job flows on indicators of judicial outcomes, using an instrument, based on local shocks in the supply of lawyers. We find that when the numbers of lawyers increase, workers litigate more often, which should increase the firing costs for the firms. This increased filing rate causes a decrease in employment fluctuations, especially for shrinking or exiting firms. The effect on employment growth is positive in the short term.

**Keywords:** employment protection legislation, job flows, labor judges, unfair dismissal, France

## Conflits du travail et flux d'emploi

### Résumé

Les conseils des prud'hommes font appliquer la législation sur la protection de l'emploi concernant les litiges individuels du travail, et notamment les procédures de licenciement. De ce fait, ils peuvent être considérés comme une composante des coûts de licenciement. Cet article utilise les variations locales des conditions d'activités des prud'hommes afin d'en évaluer l'effet sur le marché du travail. L'activité judiciaire est analysée à partir de données sur l'ensemble des affaires introduites devant les conseils de prud'hommes entre 1996 et 2003. Plusieurs indicateurs sont construits : taux de recours, taux de conciliation, taux de procès et taux de victoire des salariés.

Nous présentons tout d'abord un modèle théorique pour comprendre les liens entre coûts de recours aux prud'hommes, résultats des procédures et coûts de licenciement. Les indicateurs d'activité judiciaire sont endogènes à la conjoncture et surtout aux coûts de justice : un taux de recours élevé peut refléter un accès peu coûteux des salariés impliquant des coûts de licenciement élevés pour les entreprises ou, à l'inverse, un accès peu coûteux pour les entreprises les conduisant à être moins rigoureuses sur les conditions de licenciement.

Nous estimons ensuite l'effet sur les flux d'emploi des différents indicateurs de justice prud'homale, instrumentés par la densité locale d'avocats. Les résultats indiquent que lorsque le nombre d'avocats augmente, les salariés ont davantage recours aux prud'hommes, ce qui augmenterait les coûts de licenciement pour les entreprises. Cette hausse du taux de recours entraînerait une baisse des fluctuations de l'emploi, avec un effet plus marqué à court terme sur les destructions que sur les créations d'emplois ; l'effet de court terme sur la croissance de l'emploi serait positif.

**Mots-clés** : protection de l'emploi, flux d'emplois, conseils des prud'hommes, licenciement abusif

**Classification JEL** : J32, J53, J63, K31
Contents

Introduction 5

I - Labor Courts in France: the Institutional Setting 7

I.1 French Firing Laws 7

I.2 French Labor Courts 7

II - Judicial Activity and Firing Costs: a Simple Theoretical Framework 9

III - Data and Methodology 13

III.1 Judicial Cases Data 13

III.2 Job Flows Data 14

III.3 Instrumental Variables: Discussion and First Stage 15

IV - Main Empirical Results 19

Conclusion 23

References 24

Model Appendix 27

Appendix Tables 37
Introduction

Following the seminal paper by Lazear (1990), the effects of employment protection legislation (EPL, hereafter) on labor markets have been extensively examined through cross-country analyses, using indicators assumed to capture the national strictness of EPL (see Freeman, 2007, for a critical review). A recent strand of literature proposes more refined identification strategies by assessing the impact of EPL within a single country. The variation of dismissal costs then usually stems from different laws across time and space or across employees and firms. This strategy typically involves measuring the impact of a change in legislation targeted to a specific category within a whole country or -- in the case of the US -- the impact of the differential timing in the introduction of a new EPL across different states. Autor, Donohue, and Schwab (2006) and Autor, Kerr, Kugler (2007) take advantage of the between-state variation in the timing of the adoption of wrongful discharge laws in the US. Kugler (1999) exploits a temporal change in the legislation in Colombia, which reduced severance payments, together with the variability in coverage between formal and informal sector workers. Other papers use legislations which entail smaller firing costs for small firms (Kugler and Pica, 2008, Bauer, Bender and Bonin, 2007, Martins, 2009). A last strand of papers rely on variations induced by legal probation periods (Marinescu, 2009, Ichino and Riphahn, 2005).

In this paper, we propose another source of variation of dismissal costs. Even when labor laws do not change, the functioning of the labor courts tend to vary over time and space. As pointed out by *The OECD 2004 Employment Outlook*, even if an employer may be penalized in case of non-respect of EPL, "these provisions are subject to court interpretation and this may constitute a major (but often hidden) source of variation in EPL strictness both across countries and over time". Opening the black box of the labor courts seems a promising path. Judicial activity may sometimes matter more than the content of the law (see for example Bhattacharya and Daouk, 2002 who find that insider trading laws decrease the cost of equity only when a case has been prosecuted).

In this paper, we analyze the judicial process and its impact on the labor market. The French EPL system produces every year a large amount of legal procedures related to individual labor disputes (roughly 160,000 new cases every year, as we will see). About 1 in 4 dismissed workers indeed challenges his or her dismissal in front of a labor court.<fnref n="1" /> Almost half of these cases are won by the workers, entailing damages paid by the firms. Besides direct costs, these procedures can last for several months, with uncertain issues, which are indirect costs for firms and workers. It is these legal procedures that we analyze in this paper.

Yet using labor courts to assess the effect of dismissal costs on the labor market is not straightforward. The outcomes of the judicial processes at our disposal - the filing rate, the fraction of cases leading to a settlement or a trial, the fraction of trials won by the workers - give an indirect and partial measure of dismissal costs faced by firms.<fnref n="2" /> Besides, empirically, problems of endogeneity abound: court outcomes are not exogenous to market conditions. First, economic conditions have an effect on the quality of the cases brought to courts, leading to variations in the judicial outcomes. Second, market conditions may influence the court decisions. Ichino, Polo and Rettore (2003), using micro data on labor court cases, focus on this institutional endogeneity of EPL enforcement. Studying the case of an Italian bank over more than 20 years, they show that a higher unemployment rate increases workers' probability of winning their cases. By contrast, Marinescu (2011) - using data from a 1992 survey of Employment Tribunal Applications in Great Britain - finds that a higher unemployment rate leads to more decisions against the workers, in particular when already re-employed at the moment of trial.

<footnote n="1">¹ By comparison, an approximate number of 1,000 cases were filed in 1986 in the entire state of California, which has a population and GDP close to those of France (these figures are taken from Dertouzos, 1988). Notice though that arbitrators operate in the US before intervention of the courts, but their efforts are not recorded in any registry (a point made by John Abowd).</footnote>

<footnote n="2">² The same applies when using the introduction of new laws or indices of EPL strictness to identify the impact of the EPL on labor markets.</footnote>
To cope with such endogeneity, we propose to analyze judicial activity, conditional on economic conditions. Litigation costs are key in this analysis. Firms should take into account litigation costs when they choose between a riskless but costly strategy to fire workers and a risky but potentially less costly option. Similarly, employees should make a cost-benefit analysis before choosing to litigate. We show with a stylised theoretical model how litigation costs drive both dismissal costs and the quality of the cases brought to court, thus judicial outcomes. This model shows that conditional on economic conditions, judicial outcomes do not have a simple and univocal interpretation in terms of dismissal costs because they depend on judicial costs. For instance, an increase in the number of filed cases may be the result of larger dismissal costs for the firms if it is due to a decrease in the workers' litigation costs. On the contrary, a larger number of filed cases may well come from smaller dismissal costs when the firms' litigation costs have decreased: the employers take more risks when firing workers, leading to more trials, thus paying more on the extensive margin (more cases) but saving on the intensive margins (less expensive cases). These composition effects do not only apply to labor courts but also to divorce or more generally to any legislation that alters the decisions of workers, couples, firms when they contract, sue, or indeed go to court.<fnref n="3" /> Following the theoretical framework, we use litigation costs to instrument the indicators of judicial outcomes. More precisely, we use the lawyer density as a proxy for legal fees.

On the empirical side, our contribution is threefold. First, we consider measures of judicial outcomes directly coming from legislation enforcement with variation across space and time.<fnref n="4" /> In France, workers can contest the conditions of a firing by filing a case to one of the 264 local labor courts. We use information collected by the French Ministry of Justice on all cases that were filed over the 1996-2003 period to compute, for each geographical jurisdiction and each year, various indicators characterizing the enforcement of the labor laws: the percentage of dismissed workers who litigate in employment tribunals, the fraction of cases leading to a conciliation between parties, to a trial, resulting in a worker's victory. We match these local indicators with a local measure of the legal environment, the density of lawyers, as well as local measures of job flows à la Davis and Haltiwanger (1992).

Second, as we work at the level of France, a country in which many institutions are centralized and do not vary across the French territory (minimum wage, unemployment benefits, wage bargaining...), we are able to “control” for most of the French labor market institutions (see however Chemin and Wasmer, 2009, on the noticeable exception of the working time reduction laws in one French region, Alsace-Moselle and the one presented in this paper as a robustness check). Third, we use an instrumental variable strategy to correct for the endogeneity from which estimation of the relation between economic conditions, including job flows, and application of the labor laws might suffer. The instrument relies on the location of universities training French lawyers, irrespective of their legal specialization, and the large increase in the number of lawyers during our period. Lawyer localisation is shown to be disconnected from local business conditions. Then, after having shown through our stylised model the links between judicial outcomes and firing costs, we measure the effect of judicial indicators on job flows, measured at the intensive as well as the extensive margins. Several papers assessing EPL also use job flows (see for instance Autor et al., 2007 and Kugler and Pica, 2008). Unfortunately, due to the lack of worker flows data for the very small firms where a large fraction of our labor court cases take place, we cannot combine the joint analysis of job and worker flows as is done in Kugler and Pica (2008).

As in all of the empirical papers we are aware of, our paper focuses on the impact of labor regulations on labor market characteristics and leave aside the welfare gains from job stability which must be taken into account for policy recommendations.<fnref n="5" /> However, and in contrast with the existing empirical literature, our labor court outcomes capture some dimensions of the quality of labor relations which according to Blanchard and Philippon (2004) or Algan and Cahuc (2009) are related to the evolution of labor market conditions.

<footnote n="3">³ This has not escaped some analysts; see for instance Stevenson (2007) on legislation and divorce rates.</footnote>

<footnote n="4">⁴ Another kind of EPL enforcement is analyzed in Almeida and Carneiro (2009): the activity of the labor inspectors in Brazil.</footnote>

<footnote n="5">⁵ See Bertola (2004) for a theoretical model considering risk-averse workers and potential positive effect of EPL on welfare.</footnote>
# I - Labor Courts in France: the Institutional Setting

## I.1 French Firing Laws

Under the current French law, dismissals are classified in two types: dismissals for a personal motive and dismissals for economic reasons. Dismissals for economic reasons are redundancies due to a slowdown in the business activity and are supposed to be independent of the “quality” of the employee. Dismissals for a personal motive occur when the firm’s decision to fire a worker is triggered by a grave misconduct of the worker or an insufficient level of skills. In France as in many European countries, an economic dismissal entails a more complicated and time consuming process. This process is restrictive since the employees who can be fired first are defined by collective agreement according to their age, qualifications, etc. The process is also costly since the firms have to take measures, such as training courses, to help the employees to find another job. On the contrary, a dismissal for misconduct is a faster process - if not challenged by the worker - and implies a lower firing cost than a redundancy.

It is important to note that economic dismissals are rarely challenged. In our data, indeed, 97.5% cases come from dismissals for personal motives rather than for economic reasons.<fnref n="6" />

When fired, a French worker may sue the firm.<fnref n="7" /> Since a bill passed in 1973, every individual dismissal must be justified by a “real and serious cause” and the firm has the burden of proof. Without delving deep into 30 years of jurisprudence that have made this concept simultaneously blurred and precise, “real” means that the wrongdoing justifying the dismissal must be objectively defined, accurate, and in line with the mandatory firing notification letter. For example, being ten minutes late does not mean being seventy minutes late; a lack of performance or a lack of trust is not considered “real” if it is not objectively measured. The cause is considered as “serious” only if it is related to the professional activity of the worker and if it makes the labor relation impossible to continue. There are various degrees of “seriousness”. Some lead to “grave misconduct” (for example brawl or thievery) which allows the employer to fully deprive the worker of severance payment (in this case, the employees may also lose their unemployment benefits).

Over the 1996-2003 period under study and when the individual dismissal is deemed fair, firms have to pay severance of 1/10 of monthly salary per year of service. If the employee has worked more than 10 years in the firm, the severance amonts to 1/10 + 1/15 of monthly salary per year of service. If judges rule the dismissal as unfair, the compensatory award depends on judges’ estimates of the magnitude of the damages incurred by the worker. However, in this case, the compensatory award must be at least 6 months pay if the employee has worked more than 2 years in the firm. Unfortunately, in France, there is no data available on the level of these awards. Serverin (2002), based on a survey of 7,962 cases collected in 1996, estimates the average award asked by the worker to equal the annual (gross) minimum wage.

## I.2 French Labor Courts

The French labor justice is mainly dispensed by the “Prud’hommes” which is the relevant jurisdiction to every labor dispute arising at the individual level in France. During our period of analysis, 1996-2003, 264 Prud’hommes jurisdictions were spread all over metropolitan France, a tribunal being at most within a radius of 30 miles from any establishment.

<footnote n="6">⁶ When, for economic reasons, a firm with more than 50 employees needs to dismiss more than 10 employees within 30 days, the procedure becomes a “collective dismissal” and has to follow complex rules. In case of collective litigation, the case is treated by other courts than those treating personal dismissals. Nevertheless, the number of cases is small in those courts as well.</footnote>

<footnote n="7">⁷ The worker has to leave the firm when fired, even if he or she sues the employer. In the end, the court may reinstate the worker within the former employing firm, but it is extremely rare.</footnote>
The judges in the Prud'hommes are not professional judges and are seen by some as performing a public duty. Each labor court comprises judges representing employers and judges representing employees in equal number. These judges are elected every five years within lists established by worker unions and employer federations. On the employee side, the electoral body includes all private sector workers with a labor contract.

Prud'hommes are supposedly not very formal and should be seen as conciliation boards. They were designed to foster agreements rather than trials. Therefore a first and mandatory step in each trial is a conciliation audience where plaintiffs and defenders explain their grievance and judges try to push for an agreement.<fnref n="8" /> If they do not achieve an agreement, the case is judged. If, in the end, an equal number of judges decide in favor of a worker and against him or her, there is a tie ("solution de départage"). In this case, a single professional judge decides the outcome of the trial.<fnref n="9" />

The plaintiff or the defender can appeal the decision of the court if the stake is larger than a given threshold (about 5,000 euros in 2006). It is worth noting that 60% of the decisions were appealed in 2004. Among them, 55% of the decisions were not overruled by the Courts of Appeal and 30% were confirmed "partially".<fnref n="10" />

There are unfortunately no data on the litigation costs. The Prud'hommes institution is seen as a public good thus filing a case is cheap. The costs are mainly those induced by the representation. Workers can obtain legal help through other means than hiring a lawyer: a union member, a workmate or an administrative officer can help the worker with his or her case. However it is worth noting that, according to our data, almost half of the workers are represented by a lawyer. This contrasts with other countries for which this information is available (for instance 18% in the UK, see Fraisse, 2010).

<footnote n="8">⁸ It is worth noting that to this respect, the French setting is close to almost every OECD country, where courts usually attempt to reach a compromise solution at the start of formal legal proceedings (see Venn, 2009).</footnote>

<footnote n="9">⁹ Moreover, in case of an emergency, a summary judgment can be made. However, such judgments are only temporary and might be overruled afterwards. In this paper, we do not consider these summary judgments.</footnote>

<footnote n="10">¹⁰ Munoz-Perez and Serverin (2006). Unfortunately, current available data sets do not allow us to track the cases across the levels of jurisdictions; whether the decision is appealed by the worker or the firm is unknown.</footnote>
## II - Judicial Activity and Firing Costs: a Simple Theoretical Framework

We develop a simple analytical framework to help us understand the relationships between the various legal steps within labor courts and firing costs, taking specifically into account the conciliation step in this judicial process. Our intention is not to break new theoretical ground but rather to focus ideas. In particular, this model will help us illustrate and understand our empirical strategy and results, as the links between firing costs and the outcomes of this judicial activity are ambiguous.<fnref n="11" />

To illustrate how firing costs are related to judicial outcomes, we depart from the traditional model of litigation proposed by Priest and Klein (1984) or Bebchuk (1984) or more recently Card and McCall (2009) to run a cost-benefit analysis similar to the one proposed by Flanagan (1989) for disputes related to the compliance to the National Labor Relations Act in the US. For simplicity, the setting that we describe below has no uncertainty, no asymmetric information that would explain why trials take place; everything is known and predictable; we will come back later on this topic and discuss how our results are affected by asymmetric information.

In our analysis, the employer can deliberately choose to pay a minimal firing cost with the risk to be sued by the worker; or to pay a larger amount, which corresponds to the payment a plaintiff would accept in order to give up any further possibility of lawsuit. Important to note here that this last sum is not negotiated between the firm and the worker, but is directly derived from legal precedents (jurisprudence). In France, it should amount to one to two years of earnings (Kramarz and Michaud, 2010). Another way of understanding the model is as follows: a firm chooses to dismiss the worker either for a personal motive, paying a small severance payment, or to dismiss the worker for an economic motive (redundancy) with larger severance payments.<fnref n="12" /> Our hypothesis, then, is that when firms pay the severance payment corresponding to a redundancy, the workers never choose to sue the firm. When the worker goes to court after a dismissal, the firm has to prove that the case is a legitimate dismissal for personal motive rather than a redundancy.

In the case of a dismissal for personal motive, the firm incurs a minimum severance payment ($c_m$) if the dismissal remains unchallenged by the worker. This payment $c_m$ is lower than the maximum severance payment $c_M$, which leads the worker not to sue the firm. Yet the firm has to take into account the facts that the worker can file a suit ($p_f=1$ if he does, $p_f=0$ otherwise) and that he can then end the case with a formal agreement in front of the judge ($p_c=1$ if he does, $p_c=0$ otherwise). The firm also knows the probability that the worker wins if the trial occurs, $p_w$. We assume that during the conciliation step, the judge tries to reach an agreement using an “intermediary” severance payment $c_c$, given by the jurisprudence, always lower than $c_M$. Note that in order to simply introduce the co-existence of a conciliation stage and a trial stage we consider $c_c$ to be constant. The firm cannot increase $c_c$ in order to avoid the trial.

Uncertainty of the entire process is summarized through $p_w$. The firm and the employee share this value. In this cost-benefit analysis, we assume that the quality of each case is known by both parties and is related to observed characteristics of the workers and of the firms.<fnref n="13" /> For instance, union or personnel delegates or pregnant women are very well protected by the law, and the judges are very strict against dismissals of such individuals.

<footnote n="11">¹¹ We do not study here the theoretical impact of firing costs on labor market variables. This has been extensively examined elsewhere. To sum up, standard models show that larger firing costs entail slower and smaller adjustments, with an ambiguous effect on employment (see for instance Bentolila and Bertola, 1990), except if the firing cost can be endogenized by the firm during the wage bargaining (see for instance Garibaldi and Violante, 2005: in their model, firing costs due to EPL are the sum of two terms, a transfer from the firm to the worker, which can be endogenized by the firm, and a tax paid outside the firm-worker pair, due to the cost of the trial, which is a cost on labour which cannot be undone by side negotiations).</footnote>

<footnote n="12">¹² For an empirical illustration of a trade-off between two litigation processes, see Oyer and Schaefer (2000).</footnote>

<footnote n="13">¹³ As mentioned above, this assumption is discussed below.</footnote>
Several past statements of judgments also show that judges demand more stringent evidence when a firm has had large positive profits in the years preceding the trial.<fnref n="14" />

At this point, we have introduced no uncertainty, no asymmetric information that explains why trials take place. Without uncertainty or asymmetric information, it would be rational for firms and workers to agree on a payment in order to avoid the litigation costs and there would be no litigations. Two features could be added to the model in order to explain why firms and workers go to the Prud'hommes and then, if ever, to trial. First, costs for reaching an agreement with the help of a private arbitrator could be larger than the costs at the conciliation stage of the legal procedure. This seems plausible since the Prud'hommes institution is seen as a public good and the conciliation stage is cheap. Second, in line with the literature in which trial is an equilibrium outcome, we can assume that the worker and the firm have different and irreconcilable expectations on the outcome of the trial. This assumption would lead to a “contract zone” where a settlement amount can be found (see Bebchuk, 1984). When the expectations are not in the contract zone, the trial takes place; else an agreement can be found at the conciliation stage.<fnref n="15" /> However, when adding expectations, computations become much less tractable. Introducing these features into our framework would therefore lead to a loss of simplicity without gaining much insight for our purpose. In addition, as underlined by Spier (2007), such a model does not fully solve the litigation puzzle since the conciliation stage should help the expectations to narrow.

Now, let us go back to our analytical framework. The parameters $p_f$ and $p_c$, telling whether the case if filed and whether it ends at the conciliation stage, result from the optimization from the firm and the worker and are equal to either one or zero. The key parameters in our analysis will be the litigation costs. We note $F$ the compensatory award for the worker when winning the case, $l_c$ the firm's litigation cost when the parties reach an agreement at the conciliation stage, $l_t$ the firm's litigation cost when the parties go to trial, and symmetrically $k_c$ and $k_t$ the worker's litigation costs at the conciliation stage and at the trial stage.

The employer dismisses the worker at the minimum cost, instead of paying the maximum severance payments, if the expected firing cost is smaller:

$$p_f \{p_c(c_c + l_c) + (1 - p_c)[p_w(c_m + F) + (1 - p_w)c_m + l_t]\} + (1 - p_f)c_m < c_M$$

As for the worker, he or she chooses to challenge his or her dismissal ($p_f = 1$) if his or her expected gain at trial or at the conciliation stage is larger than the minimum severance payment:

$$p_w(c_m + F) + (1 - p_w)c_m - k_t > c_m \text{ or } c_c - k_c > c_m$$

### Result 1:

Under various technical assumptions (presented in the model Appendix), four potential regimes define judicial outcomes, depending on the value of $p_w$ and three thresholds $\bar{p}_w$,

$$\bar{p}_w, \bar{p}_w^*: \bar{p}_w = \frac{k_t}{F}, \quad \bar{p}_w = \frac{c_c - c_m + k_t - k_c}{F}, \quad \text{and} \quad \bar{p}_w^* = \frac{c_M - c_m - l_t}{F}.$$

<footnote n="14">¹⁴ Unfortunately, the data do not contain a firm identifier. Hence, it is not possible to directly relate firm and worker behavior.</footnote>

<footnote n="15">¹⁵ It is however interesting to note that workers employed in large firms go much less often to Prud'hommes. In line with the above discussion, the various probabilities should be better known by the human resources management and union delegates that are present in the larger firms. Hence, they can more easily escape trials and agree on separation payments. In small firms, conflicts often become personal and difficult to solve without the help of a neutral third party, a role apparently played by the Prud'hommes.</footnote>
- For small probabilities ($p_w < \overline{p_w}$), no case is filed. Indeed, the firm pays $c_m$ and the worker does not go to court since the firm would refuse any conciliation procedure whereas the gain at trial would be negative for the worker.

- For larger probabilities ($\overline{p_w} < p_w < \overline{p_w}$), conciliation takes place. Since the expected gain of the worker at trial is positive, he or she can credibly threaten the firm to go to a full hearing. The firm accepts to settle with the worker because the settlement amount is lower than the expected loss of the firm at trial (and larger than the expected gain of the worker).

- For even larger probabilities ($p_w < \overline{p_w} < p_w^{**}$), the worker is better off at the trial stage and refuses to conciliate anymore. The firing cost gradually increases when the probability of winning increases.

- And finally, for the largest probabilities ($p_w > p_w^{**}$), the firm pays $c_M$ up front to avoid the costs of going to court.

These regimes are presented in Figure 1 where the firing costs are graphed as a function of the probability of winning of the case. Proofs are given in the model Appendix. The technical assumptions are four inequalities between the different costs which allow the four regimes to exist. For instance, the cost of trial for the firms must be large enough so that the conciliation is less costly in some cases. Note that, in our data, the four regimes exist in all jurisdictions.

We can now illustrate the effects of changes in the litigation costs. Let assume that economic conditions are given. We assume that the distribution of the case quality is invariant, meaning that the distribution of $p_w$ of the dismissed persons is given. The total firing cost for the firm is given by:

$$[G(\overline{p_w})c_m + (G(\overline{p_w}) - G(\overline{p_w}))c_c + l_c] + (G(p_w^{**}) - G(\overline{p_w}))\Omega(p_w) + (1 - G(p_w^{**}))c_M]L$$

where $L$ is the number of fired workers, $G$ the cumulative distribution function of the case quality of these fired workers and $\Omega(.)$ is the function $\Omega(p_w) = p_w(c_m + F) + (1 - p_w)c_m + l_c$. This firing cost is the area under the broken line in Figure 1, weighted by the distribution function of the case quality.

Suppose now that the litigation cost for the firm $l_t$ increases. Figure 2 illustrates the results.

$p_w^{**}$ is the only threshold which changes: it decreases. The expected firm's cost at trial rises thus the firm has a greater incentive to fire high probability workers with an economic motive to avoid lawsuits. The total firing cost increases as the area under the full line is bigger than the area under the dash line. This cost is larger even if the number of trials decreases.

## Result 2:

If the litigation cost for the firm $l_t$ increases, the total firing cost increases, assuming that the distribution of the case quality is given. The numbers of filed cases and trials decrease, as well as the quality of the filed cases.

Lastly, let us study the following case: an increase in the litigation cost for the worker $k_t$ (see Figure 3). This increase induces a decreased probability for the workers to file a case
(through a higher $\bar{p}_w$) as well as an increase in the number of workers who prefer to conciliate (through a higher $\overline{p_w}$).

**Result 3:**

If the litigation cost for the worker $k_t$ increases, the total firing cost for the firm decreases. The numbers of filed cases and trials decrease, as in the previous situation.

This model shows that changes in the litigation costs have intuitive impacts on the firing costs: firing costs increase with firms' litigation costs and decrease with workers' litigation costs. Besides, changes in the litigation costs have an effect on judicial outcomes, which is important to justify our instrumental strategy. Yet the link between firing cost and judicial outcomes is ambiguous; the model will be useful to interpret the results of our instrumental strategy since we aim at assessing the effect of firing costs on the labor market.
# III - Data and Methodology

## III.1 Judicial Cases Data

Our data source on individual cases comes from administrative records made at the level of each geographical jurisdiction and collected by the statistical department of the French Ministry of Justice. The primary goal of these data is to monitor the activity of labor courts with an emphasis on speed of treatment. The data source is exhaustive for the period 1996 to 2003. It includes approximately 1.3 millions individual cases for 8 years (around 160 000 cases each year).<fnref n="16" />

For each case, the starting date, the ending date, the motives for dismissal, and the court decision are recorded. An average case takes approximately one year (343 days) with a standard deviation of 9 months.<fnref n="17" /> For each case, we know the legal representation chosen by the firm and the plaintiff. Few characteristics of the employee-plaintiff are available: mainly gender and age. As for firms' characteristics, we know the industry and the size (more or less than 10 workers). The size of the firm has to be known by labor court judges because labor laws differ for small firms; more specifically, they are less stringent and try to ease the financial costs of firing that could hurt them irreversibly. Small firms are overrepresented with 56% of the filed cases whereas they correspond to 25% of the labor force.<fnref n="18" />

The judicial motives for suing are multiple. The nullification of a dismissal is asked in the majority of cases (58%). 21% of plaintiffs ask for some compensation that was not paid by their former employer whereas 9% of plaintiffs do not agree with the level of their severance payment. Yet, whatever the motive is, the judgments of the trials won by the workers are very similar: a compensatory award paid to the plaintiffs. Even when the nullification of the dismissal is asked, in the very vast majority of the cases won by the workers, they are not reinstated but receive a compensatory award. Thus, in this paper, we do not distinguish between these different motives.

For any given case filed in a labor court, the range of outcomes is wide. A case can lead to a full tribunal hearing and be lost or won. It can be classified as null and void if the plaintiff has not shown due diligence in the conduct of his or her case. The case can also be crossed out. Finally, a case can either be conciliated during the conciliation step or outside the tribunal with a formal agreement sent to the court.

These data on individual cases are used to compute several aggregate measures of the cases examined in each jurisdiction-year pair. The first indicator relates to litigiousness: the filing rate, number of cases over the number of dismissed persons.<fnref n="19" /> The three other indicators describe the main outcomes of the cases, which are: the worker and the firm manage to conciliate, or they go to trial, and in that case, either the worker wins or not. Thus we build three indicators: the conciliation rate, number of cases conciliated or having led to an agreement over the number of cases; the trial rate, number of cases having reached trial

<footnote n="16">¹⁶ We will not consider the 2% of cases involving employers as plaintiffs.</footnote>

<footnote n="17">¹⁷ Because we use jurisdiction-level information for our analysis, rather than case-level information, our Tables will report jurisdiction-year statistics. All case-level statistics are available from the authors on request.</footnote>

<footnote n="18">¹⁸ The variable size of the firm exhibits a lot of missing values at the beginning of our period. Excluding 2003, which appears to be an outlier, the quality of the variable increases gradually (42% of missing value in 1996 to 14% in 2002). At the same time, the share of small firms increases (42% in 1996 to 90% in 2002). 56%, the average on our period, might be a lower bound. Because of these changes in the quality of the variable, we did not try to analyse the effects of judicial activity for small and large firms separately.</footnote>

<footnote n="19">¹⁹ No exhaustive statistics give the number of dismissed persons in France; we are thus obliged to have a proxy through the number of registered unemployed who declare being unemployed because of a dismissal. These figures come from a data set compiling the stock of unemployed registered at the national employment service at the end of the year (ANPE at this time) in each city, distinguishing the reasons for being unemployed (dismissal, entry into the labor force, end of temporary contract...). As for job flows (see below), we aggregate these data at the jurisdiction level.</footnote>
over the number of cases;<fnref n="20" /> the worker winning rate, number of cases having led to a victory for the worker over the number of cases.

During our period, 1996 to 2003, no change were made to the labor laws. The number of cases treated by labor courts appears to be stable over the period, in stark contrast with what happened in some countries such as the UK where a sharp increase took place (Burgess, Popper and Wilson, 2001). It is important to note that the percentage of filed cases among the dismissed persons is large (mean of 22%, see Table 1). Almost one dismissal over four ends at the labor court.

Despite the conciliation step which is mandatory, and promotes a quick and costless resolution of the cases, about 60% of cases end up with a trial, among which 75% lead to a worker's victory. Of all filed cases, only 20% end at the conciliation stage, or lead to an agreement notified to the court, or to a withdrawal on the worker's side. 19% of the cases are crossed out or classified as null and void if the plaintiff has not shown due diligence in the conduct of his or her case.

All indicators of judicial activity display a very strong variance over time and across jurisdictions. Our model can help us understanding two main sources of variability: business cycle and litigation costs. We will discuss below the links between the business cycle and the judicial activity, which are a source of endogeneity. Then we will explain that institutional variability in the number of lawyers entail different litigation costs at the jurisdiction level. This will give us our instrument.

### III.2 Job Flows Data

We want to assess the impact of our judicial indicators on the functioning of the local labor markets. Besides local employment, we build job flows variables, to assess whether the effect of judicial activity is different on expanding and shrinking units. Local employment flows at the establishment level are computed from the SIRENE files, maintained at the French statistical institute (INSEE).<fnref n="21" /> These files give the precise location (city) for each establishment. We compute a set of Davis and Haltiwanger (1992) indicators over the 1996-2003 period: annual job creations, job destructions, and net employment growth rates. Job creations equals employment gains summed over all expanding or new business units. Conversely, job destructions equals employment losses summed over all shrinking or exiting business units.

These measures are aggregated at the jurisdiction level, using a 1999 correspondence between cities and jurisdictions provided by the Ministry of Justice. The rates of job creations and job destructions from year *t* to year *t+1* are computed relative to average employment in the two years. Thus the job creation rate is defined for the jurisdiction *j* and year *t* as:

$$POS_{jt} = \sum_{e \in E_{jt} / x_{et} > x_{et-1}} \frac{x_{et} - x_{et-1}}{(X_{jt-1} + X_{jt}) / 2}$$

where $E_{jt}$ is the set of establishments in the jurisdiction *j* at time *t*, $x_{et}$ is the number of jobs in the establishment *e* and $X_{jt}$ is the total number of jobs at the jurisdiction level.

$$\text{The job destruction rate is defined as } NEG_{jt} = \sum_{e \in E_{jt} / x_{et} < x_{et-1}} \frac{|x_{et} - x_{et-1}|}{(X_{jt-1} + X_{jt}) / 2}.$$

<footnote n="20">²⁰ Because cases can also be dropped, the sum of the conciliation and of the trial rates is smaller than one.</footnote>

<footnote n="21">²¹ Unfortunately, these data do not allow to distinguish between open-ended contracts and short-term contracts.</footnote>
Job reallocation equals job creations plus job destructions: it is an indicator of employment fluctuations. And the net employment growth rate is then

$$NET_{jt} = POS_{jt} - NEG_{jt} = \sum_{e \in E_{jt}} \frac{x_{et} - x_{et-1}}{(X_{jt-1} + X_{jt})/2}$$

We also define rates at the extensive margins: creations due to new establishments and destructions due to exiting establishments.

$$ENT_{jt} = \sum_{e \in E_{jt} / x_{et-1}=0} \frac{x_{et}}{(X_{jt-1} + X_{jt})/2} \quad \text{and} \quad EXITS_{jt} = \sum_{e \in E_{jt} / x_{et}=0} \frac{x_{et-1}}{(X_{jt-1} + X_{jt})/2}$$

In comparison with cross-country analyses, these indicators also show a high heterogeneity across periods and across the 264 geographical jurisdictions. The job creation rate and the job destruction rate hover around an average of 16%; with the mean of net employment growth rate being zero (see Table 1).

To measure local unemployment, we use the number of unemployed as registered at the public employment office (ANPE) for each city as well as the city labor force as measured at the 1999 Census. Unfortunately, there is no data set giving us, at the local level of the city, the size of the temporary help service industry. Hence, we cannot perform an analysis as done in Autor (2003). However, in contrast with other European countries (such as Spain), the fraction of temporary workers in French total private employment is low (about 2.5% in 2009).

Finally, we cannot analyse worker flows since such measures are not available for establishments with less than 10 workers whereas those establishments are overrepresented among the establishments sued by the workers. In addition, because France has a dual labor market with both short-term and long-term contracts (see Abowd et al. 1999), it is essential to also measure the contractual arrangements for an analysis of worker flows. Indeed, other papers show that in a dual labor market as most of European countries have, an increase in dismissal costs may have ambiguous impact on worker flows (see for instance Addison and Teixeira, 2003, for a survey of the literature, or Boeri, 1999. for a theoretical model showing that strict EPL and large worker flows can coexist). The main explanation is the following: when it becomes more costly to fire employees on open-ended contracts, firms partly substitute open-ended contracts with short-term contracts (when hiring new employees).<fnref n="22" /> This substitution should be partial since firms also need to build long-term relationships and since short-term contracts are regulated and cannot be used extensively and at will.<fnref n="23" /> Yet, by nature, short-term contracts induce larger turnovers than permanent contracts.<fnref n="24" /> Thus an increase in firing costs of permanent contracts would imply less flows from permanent workers but higher flows of temporary contracts leading to an ambiguous effect in total worker flows.

### III.3 Instrumental Variables: Discussion and First Stage

We want to assess the causal effect of our indicators describing labor disputes on job flows. Yet the judicial activity is likely to be endogenous. Our model can be used to discuss the endogeneity problems that we will face when estimating the relations between judicial outcomes and labor market characteristics. For instance, bad economic conditions probably change the distribution of the case quality among the dismissed persons. The distribution G

<footnote n="22">²² Usually, in European countries, dismissal costs for short-term contracts are very large so that dismissals of workers in short-term contracts are rare.</footnote>

<footnote n="23">²³ In 2003, 12% of employees are employed with a short-term contract in France.</footnote>

<footnote n="24">²⁴ Abowd, Corbel, Kramarz (1999) illustrate this point by showing that dismissals are a small fraction of separations in France, most of separations are due to quits and ends of short-term contracts.</footnote>
of the model is then likely to change. If the proportion of persons having a good case
increases, the filing case would increase (except if the cases are too good, which would
induce firms to pay enough to avoid trials). An adverse shock on the labor market conditions
can also affect litigation costs through the level of compensatory award. According to the
legislator, F compensates the worker for past and future potential wage losses, in particular
by taking into account the difficulty of finding a new and comparable job. The magnitude of F
is therefore likely to be countercyclical.<fnref n="25" /> An economic downturn pushes $\bar{p}_w$, $p_w$, and $p_w^{**}$
downwards which results, other things being equal, in higher firing costs. Moreover,
economic conditions might also alter the overall distribution of $p_w$ through judges’ behavior.
Judges showing a pro-worker bias when labor market conditions deteriorate increase the
firing costs faced by the firms (see Ichino et al., 2003).

Thus we need instruments which explain the judicial outcomes observed at the level of the
jurisdiction and are exogenous to current labor market developments. According to the
model, a good instrument would be a source of variation of litigation costs, exogenous to
local economic conditions.

Our instrument is the number of lawyers enrolled at the local bar in every year – lawyers of all specialties, not only those specializing in labor disputes, a small fraction of the total – scaled by total employment of the jurisdiction (“lawyer density” hereafter). In France, each lawyer has to get licensed and registered at the local bar (“barreau”) in order to be entitled to practice. We know the number of lawyers registered at each such “barreau” from 1996 to 2006. It allows us to have a local estimate of the number of lawyers (divided by total employment in the jurisdiction). As there are fewer bars in France than Prud’hommes jurisdictions (181 versus 264), we match each Prud’homme to the closest bar using shortest route distance and compute the number of lawyers available to employees depending on one single Prud’homme. Using the 1999 Census, the jurisdiction average is 24 lawyers per 10,000 persons in the labor force, going from a minimum of 2 to a maximum of 464 (see Table 1).

An increase in lawyer density is likely to reduce legal fees thanks to greater competition (see Siegelman and Donohue, 1995, for a similar argument). It is important to note that the level of legal fees in France is unregulated; the law frames the type of prices (which, for instance, cannot be entirely determined by the judicial outcome) but not the level of prices. Increased lawyer density also helps to disseminate legal expertise and judicial knowledge of labor disputes among the population of workers. It should correspond to a lower cost of litigation for the worker ($k_t$ and $k_c$ in our model) and hence influence the judicial activity and the case outcomes. This result of our model is true even without assuming that being represented by a lawyer increases the probability of winning.

Given data availability, it is empirically hard to test such a relationship in the French case. There are no data on legal fees; yet it is possible to verify that lawyer density is negatively correlated to lawyer income. Exploiting a 2008 report published by the French National Bar, we are able to regress at the regional level – there are 21 regions in France – lawyer income on lawyer density controlling for mean wages (to correct for regional differences in the cost of living and income). In this regression estimated for the year 2006, the coefficient of the density variable is negative and strongly significant.<fnref n="26" /> Thus changes in lawyer density within a Prud’hommes should influence judicial outcomes through the cost of the litigation process.

One could argue that the lawyer’s choice of location depends on local economic conditions.
But, first, labor disputes are only a small amount of the total number of civil cases (11% at

<footnote n="25">²⁵ Regressions of our indicators of judicial activity on local unemployment rates show that they are strongly correlated with the cycle (see Table A.1). The cyclical behavior of collective conflicts has been extensively studied in the literature (see Harrison and Stewart, 1994, or Devereux and Hart, 2011). The evidence about individual disputes is less extensive (see however Siegelman and Donohue, 1995).</footnote>

<footnote n="26">²⁶ Results are available from the authors.</footnote>
the national level)<fnref n="27" />; thus it is unlikely that the labor market of the lawyers is affected by the activity of the Prud'hommes. Second, in order to get a license to practice, a lawyer must enroll the local bar which jurisdiction the Prud'hommes belongs to. This requirement and the building of a reputation and a clientele induce a low mobility of lawyers from one region to another.

We think there are two main factors explaining the lawyers' location preferences, which are unrelated to the incidence of labor disputes litigation: the location of their law schools and the region where they were born (both locations often being the same ones). First, a lawyer typically *enrolled the bar the city where he or she studied*: legal studies are vocational and include a period of apprenticeship, usually in a closeby law firm.<fnref n="28" />

A second factor explaining the location preferences is the region of birth. This is not specific to lawyers<fnref n="29" />; nevertheless lawyers can settle more easily close to their region of birth than many other similar occupations with labor markets less dispersed geographically over French territory. To illustrate this, we used the Labor Force Survey to compute descriptive statistics on the percentage of workers who work in their birth "département".<fnref n="30" /> We restrict the comparison to the persons born in metropolitan France and having a university degree. In 2004, this percentage is equal to 45% for the lawyers to be compared to only 14% for the engineers. This figure is particularly high bearing in mind that it does not correct for the fact that the 'département' where the lawyer lived during his or her childhood may be different from the one where he was born.

In our empirical strategy, we include jurisdiction fixed effects. Thus the effects will be estimated thanks to changes in lawyer density *within* a Prud'hommes. We take benefit of large demographic changes during our period of estimation. Between 1996 and 2003, the number of lawyers increased continuously, with an average annual growth rate of 3.7%: there were 60,000 lawyers in 1996 and 78,000 in 2003. This increase is largely explained by a global increase in France of the students attending the university during the 90s, in particular of female students. As we said, a large part of these students enroll in the bar close to their university. Thus the increase in the number of students, including students in law schools, entailed an increase of the number of lawyers in those regions where there is a law school. To see this, first note that there are only twelve law schools spread over the French territory (see Figure 4). Then, observe the strong overlap between these areas where lawyers are trained and those that see the strongest increase in lawyer density over our time period (see Figure 5).

To sum up, changes in lawyer density are likely to be exogenous with respect to current labor market developments because lawyers' mobility is mostly driven by exogenous supply shocks due to demography and lawyers' location preferences, therefore making lawyer density a plausible instrument. Further supporting the identifying assumption that local labor market conditions are disconnected from the increase in lawyer density, lagged job flows are found to have no predicting power on lawyer density when including jurisdiction fixed effects and year dummies (see Appendix Table A.2).

## First stage and reduced-form regression

Table 2 presents the instrumental regressions (first stage) for each of our indicators of judicial activity on the lawyer density, controls (year and business cycle indicators, appropriately transformed as will be described later), and jurisdiction fixed effects. Lawyer

<footnote n="27">²⁷ See available on line Info Stat justice (2005) « Une évaluation de l'activité des juridictions en 2004 » n° 80.</footnote>

<footnote n="28">²⁸ It is worth noting that in France, very few lawyers are employees, even when they work in a law firm. Thus building and keeping a clientele is crucial.</footnote>

<footnote n="29">²⁹ See for instance a lot of papers on teachers finding that the distance between teachers' place of birth and place of work is one of the main driving forces for teacher mobility. The literature on the labor market of physicians also shows that personal determinants play a greater role than economical determinants in the location choices.</footnote>

<footnote n="30">³⁰ A French "département" is equivalent to an American county.</footnote>
density positively affects filing and conciliation but negatively affects trials and workers'
(victory. Hence, a larger supply of lawyers appears to favor the rule of law (more filings) and
reinforce the negotiating role of lawyers over its trial-lawsuit role. In the following, our
preferred specifications are the ones with the filing rate and the conciliation rate, since in
both cases, the first stages display large F-tests (see Table 2).

We examine now whether these estimates can be better understood in the light of our
model. Consider lawyers and assume that an increase in their number induces a decrease in
the costs of litigation for the worker ($k_t$ and $k_c$), the decrease being larger for the cost at the
trial stage than at the conciliation stage. We assume that the impact on the costs of litigation
for the firm is negligible.<fnref n="31" />

Under such assumptions, the model shows that $\bar{p}_w$ decreases more than $p_w$: more
workers file a case since it is less costly, and end more often the case at the conciliation
stage than at the trial stage. Finally, the firing cost increases for the firms (see Figure 6). The
filing rate increases since the number of dismissals is supposed to be constant. This is
consistent with the results of the first stage in Table 2: more lawyers imply a higher filing
rate. As for the conciliation rate and the trial rate, the results of the model are ambiguous
since the denominator is the number of filed cases which increases. The results depend on
the distribution of $p_w$. If the distribution is uniform, we find the same results as those in
Table 2: a higher conciliation rate, a lower trial rate and a lower worker winning rate since the
new workers who litigate have smaller probabilities of winning.

To check that our instrument is well correlated with job flows, we estimate the reduced-form
regression (see Table 3). Lawyer density has a strong negative effect on job destructions,
resulting in a clear positive effect on net employment growth since job creations are barely
affected. Half of the effect on job destructions comes from the extensive margin, meaning a
smaller destruction rate of firms. Yet this last effect is less significant.

<footnote n="31">³¹ Another way of understanding this hypothesis would be to assume that workers are more cost sensitive than firms. In any case, this hypothesis seems to be confirmed by the data. When regressing the fraction of firms represented by a lawyer on the lawyer density, it appears that the supply of lawyers has no significant effect on the firm lawyer rate. On the contrary, the fraction of workers represented by a lawyer is positively correlated with the lawyer density. Results are available from the authors.</footnote>
IV - Main Empirical Results

Now, we can turn to our main econometric model:

$$Flows_{j,t} = \alpha_1 BC_{j,t} + \alpha_2 BC_{j,t-1} + \beta JudicialInd_{j,t} + \delta_j + \gamma_t + \varepsilon_{j,t} \quad (1)$$

where JudicialInd$_{j,t}$ is an indicator of judicial activity where the unit of observation is a Prud'hommes jurisdiction j for year t. BC$_{j,t}$ is a business cycle indicator. Our labor market variables Flows$_{j,t}$ are the job flows at the jurisdiction level j at date t. δ$_{j}$ is a jurisdiction fixed effect; γ$_{t}$ is the year indicator, and ε$_{j,t}$ is the residual. In each regression, observations are clustered at the local jurisdiction level. The jurisdiction areas display a large heterogeneity in size (measured by labor force or employment). We weight our regressions by the 1999 labor force of the jurisdiction area.

We cannot use a business indicator such as the local unemployment rate, which is clearly too directly correlated to the job flows. Local unemployment rate probably reflects unobserved economic shocks which impact simultaneously the quality of the cases brought to labor court, bias the judges in their decisions, and affect the job flows. Thus we build an indicator of the business cycle, which takes into account the initial differences across jurisdictions and reflects the national business cycle. To do so, we instrument the measure of the local business cycle (number of unemployed registered at the local employment agency divided by the 1999 local labor force) by the national unemployment rate (in the spirit of Bartik, 1991 or Blanchard and Katz, 1992) using the following relation:

$$U_{p,t} = \delta_p + \gamma_t + \mu_p U_t^{\text{aggregate}} + \eta_{p,t} \quad (3)$$

Then, we use the predicted value $\hat{U}_{p,t}$ of $U_{p,t}$ by (3) to compute our exogenous measure of cycle BC as $\frac{(\bar{U}_p - \hat{U}_{p,t})}{\bar{U}_p}$ where $\bar{U}_p$ is the average over time of the predicted local unemployment rate $\hat{U}_{p,t}$.

Table 4a presents estimates of model (1) using OLS, without any control, except for jurisdiction fixed effects. Coefficients are often significant and close to 0.1 - 0.2. The filing rate and the conciliation rate are positively related to job destructions and negatively related to job creations and employment changes. The opposite is observed for the trial rate and the worker winning rate.

Table 4b presents estimates of the same OLS equation with additional controls for the prevailing economic conditions: year fixed effects and business cycle indicators. Most of the coefficients become non-significant, those that are significant have the opposite sign to that of Table 4a. Hence, OLS estimates are very sensitive to the business cycle, the major source of endogeneity, as advocated just above.

To estimate the parameter β measuring the causal impact of judicial activity on job flows, we adopt the instrumental approach described above and, therefore, project our judicial indicators on our instrument, business cycle indicators, year dummies and local labor market fixed effects.

Our IV results are presented in Table 5. The estimated coefficients are of the same sign as in our OLS specification with business cycle controls (Table 4b). But now, most estimated coefficients are significant and of larger magnitude. In particular, an increase in filing rates dampens employment fluctuations, mostly in shrinking firms (job destructions), with a small positive aggregate effect. The effect on job destructions partly comes from the extensive
margin, the coefficient being negative albeit marginally significant. Besides, a larger conciliation rate dampens job destructions when a larger trial rate and a larger worker winning rate both increase job destructions. Hence, our IV results appear to better control for the endogeneity due to the business cycle with its joint effect on job flows and filing rates.

All signs are consistent with our previous analysis based on the theoretical model. To sum up, a larger lawyer density encourages workers to file their case, presumably because it is less costly for them to challenge their dismissals. Hence, more workers go to the court, with lower probabilities of winning. Proportionally, more of them find an interest in ending the case at the conciliation stage rather than at the trial stage. Thus, the conciliation rate increases, the trial rate decreases; and the worker winning rate decreases since those workers that go to the trial stage also have a lower probability of winning. All these judicial outcomes are accompanied by an increase in the firing costs for the firm. Table 5 shows that this increase in the firing costs is followed by a decrease in employment fluctuations, with a larger effect on shrinking firms. Thus there is a positive effect on employment growth. Yet this last result is less robust since the coefficient is less significant in the filing rate specification which is our preferred IV specification.

The estimated effects are large. A one standard-deviation increase in the conciliation rate or in the filing rate decreases the job destruction rate by 1.8 standard-deviations: job destructions (i.e. the growth rate of employment losses) are decreased by 7 percentage points in jurisdictions where the filing rate is one standard-deviation larger. The effects on net employment growth are smaller: they stand between 0.6 and 1.1 standard-deviations (in absolute value) according to the filing rate and the conciliation rate specifications. Thus total employment growth rate is larger by 4 to 7 percentage points in jurisdictions where the filing rate is one standard-deviation larger.

Our results are difficult to compare with those contained in previous papers since most of them estimate EPL effects through changes in the legislation. Our results of larger firing costs entailing less employment fluctuations is coherent with Autor et al. (2007) and Kugler and Pica (2008). Autor et al. (2007) also find a positive effect on employment growth. In their paper, they appear skeptical facing this result. Yet we bring another piece of evidence that firing costs could, in the short term, increase employment level. This is not contradictory with theory which is ambiguous on employment effects; yet this is different from most empirical studies where the effects on aggregate employment stocks are either negative or insignificant. However, our analysis focuses on very short term effects since our estimates are on employment growth with jurisdiction fixed effects. This could be an explanation of the differences with papers estimating more structural EPL effects (like in cross-countries analyses).

That judicial activity has an immediate causal effect on job flows might seem surprising. First, similar regressions using lagged (one year) indicators of judicial outcomes give similar results. Second, even though the dynamics of our indicators is not easy to understand, it is important to remember that the outcomes of cases are measured in the year when the case ends. Hence, most cases have started in the preceding year (or even before). Firms therefore have a relatively clear view of the process as well as of the probability of winning their case. All the more so that (roughly) one fourth of dismissals ends in court; most employers have experienced at least one and often multiple trials.

Abowd et al. (1999) show that French establishments, with fifty or more employees, use entries more intensively than exits as the main tool for adjusting employment. More precisely, French establishments always hire, at an increasing rate with employment growth (see their Figure 1). Simultaneously, separations are flat, except for the very largest job destructions when establishments drastically increase firings. Using such results, we may attempt to interpret our findings in terms of worker flows as long as most adjustments are relatively small and assuming that the way of using the worker flows to adjust the employment is similar in small establishments than in establishments with fifty or more employees. Under these assumptions, since larger firing costs decrease employment growth, this decrease should come from less entries, this effect being larger in shrinking firms. Since we expect long-term contracts to be partly replaced by short-term contracts, our
results suggest that when firms reduce total entries because of more costly court cases, they will mostly achieve this reduction by reducing entries under open-ended contracts, even though entries under short-term contracts might still increase.

### Robustness Check

The effects of our judicial outcomes on job flows are large. In order to assess their plausibility we provide one robustness assessment. This check exploits a natural experiment ran at the local level in the jurisdiction of Grenoble. Grenoble is a city located at the foot of the French Alps in southeastern France. The jurisdiction of the labor court of Grenoble is the 15th largest jurisdiction in terms of its 1999 labor force (254.567). In 1996, in order to facilitate dispute resolution the French Parliament passed a law empowering the judges to mandate a mediator. This law went unheeded since labor courts were already supposed to invite the parties to stop the case before trial thanks to the mandatory stage of conciliation. In 1995, the judge Blohorn-Brenneur was appointed at the Circuit court of appeals of Grenoble and decided to exploit the possibilities offered by this law in order to boost the conciliation process. Starting in 1998, this was done by a) sending out an information letter and a questionnaire to the parties in order to increase parties' awareness of mediation, b) offering mediation and conflict management training to the judges of Grenoble, and c) organizing specific hearings where mediation services were proposed to the parties.<fnref n="32" /> We will see that this experiment led to a strong increase in the conciliation rate from 1998 onwards at the Grenoble jurisdiction. In order to assess its impact on job flows, we run a simple difference in difference regression of the form:

$$Flows_{p,t} = \alpha_1 BC_{p,t} + \alpha_2 BC_{p,t-1} + \beta \times Grenoble \times Post1998 + \delta_p + \gamma_t + \varepsilon_{p,t} \quad (4)$$

where Grenoble is an indicator equal to one for the jurisdiction of Grenoble interacted with an indicator equal to one during the treatment period (1998-2003). We present in Table 6a the estimates of equation (4) using different control groups. First, we use all other French jurisdictions. Results are presented in the first panel of Table 6a. Then, because some local specific shocks might put at risk the identifying assumption of this first difference-in-difference method, we consider the following control groups 1) the jurisdictions of similar sizes (i.e. with a 1999 labor force between 150,000 and 400,000) and 2) the jurisdictions surrounding the Grenoble jurisdiction (the other jurisdictions within Isère, the 'département' where Grenoble is located and the jurisdictions belonging to 'départements' contiguous to Isère). Results are presented in the second and third panels of Table 6a, respectively. The last column of this table presents the estimated impact of the experiment on the conciliation rate (i.e. the estimates of $\beta$ associated with equation (4) where the conciliation rate is the endogenous variable).

First, focusing on this last column, and as claimed above, the Grenoble experiment increased substantially the conciliation rate by around 8 percentage points, i.e. about one standard deviation of the conciliation rate measured across years and jurisdictions. The difference is similar when Grenoble is compared to contiguous jurisdictions and jurisdictions of similar size. Turning to the impact of the experiment on job flows, as already obtained in our instrumental approach, a higher conciliation rate dampens job destructions. Although obtained on slightly different time periods and with different identification strategies, (interpretable as a local average treatment effect, as suggested by Imbens and Angrist, 1994), the two measures of the causal impact of the conciliation rate on job destructions have similar magnitudes.

<footnote n="32">³² See Blohorn-Brenneur (2010) in « Refondation du droit social, concilier protection des travailleurs et efficacité économique », Jean Barthélémy et Gilbert Cette, Rapport du Conseil Economique et Social. The summary in English of the whole report is to be found page 191-197. The Judge Blohorn-Brenneur founded with others the European Association of Judges for Mediation in 2003.</footnote>
To compare the magnitudes more precisely, we run an IV estimation using the difference-in-difference variable (i.e. Grenoble*Post1998 indicator) as an instrument, as in Duflo (2001). Results are given in Table 6b. We find coefficients on job destructions that are very similar to those in the IV specification using lawyer density. The results on job creations and employment growth are less coherent in the magnitudes of the estimates; nevertheless the signs are the same.
Conclusion

This article exploits judicial activity as a source of variation in dismissal costs: in France, a large part of the firing cost comes from the compensatory awards given to the workers through the judicial process, knowing that one dismissed person over four challenges her dismissal in front of the labor court. Since local conditions of the judicial activity vary, we use this source of variation to assess the effect of dismissal costs on the labor market. Judicial activity is analyzed using an original data set of individual labor disputes brought to court over the years 1996 to 2003. First, we present a simple theoretical framework helping us to relate litigation costs, judicial outcomes and firing costs. Indeed, the model shows that judicial outcomes are ambiguously related to dismissal costs. For instance, an increase in the firm litigation cost induces an increase in the firing cost and a decrease in the filing rate. By contrast, workers faced with a negative shock on litigation costs are more likely to sue the firm; a larger filing rate is now associated with smaller firing costs.

Moreover, judicial outcomes are endogenous: economic conditions have an impact on the quality of the cases. For an instrumental approach, litigation costs can be good instruments if their changes are not driven by local economic conditions. In this article, the instrumental variable is the lawyer density which is a proxy for judicial fees. Because lawyers tend to open their practice close to the university they were enrolled at, and because demographics led to a large increase in the number of lawyers during our period, changes in their numbers should be unrelated to the number of cases in each labor court except through the litigation costs. Using the lawyer instrument, we show that judicial outcomes have a causal effect on job flows. Higher filing rates dampen employment fluctuations, yet with a larger effect in shrinking firms. It leads to a small positive effect on net employment growth. Yet this last result is less robust to different specifications.

These results can be interpreted through the eyes of our model: in the jurisdictions where the number of lawyers increases, legal fees are reduced and so are the litigation costs for the workers. They litigate more often, yet with “bad” cases ending more often at the conciliation stage. As a result, the firing costs increase for the firms. Then our empirical analysis shows that facing these higher firing costs, firms decrease the job flows, yet adjusting more on the destruction than on the creation margin. Finally, a decrease in the litigation costs for the workers seems to stimulate employment growth.

These results on employment fluctuations confirm previous papers using job flows as well (Autor et al., 2007, and Kugler and Pica, 2008). The novelty is this new source of variation of dismissal costs, which allows identifying the effects without being dependent on new legislation. The novelty is also in the magnitude of the effects. It means that the differences in the judicial environment within a country, with the same labor laws, can induce large differences on the local labor market. Therefore, the enforcement of labor laws should be taken into account when comparing the impact of regulation across countries and populations. Yet we also show that interpreting judicial outcomes in terms of firing costs is not straightforward: in our analysis, a higher firing cost is associated with a higher conciliation rate and a lower trial rate. On the contrary, litigation costs have more direct interpretations and could be more often used to compare the level of the EPL enforcement across countries.
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Model Appendix

The employer dismisses the worker at the minimum cost, instead of paying the maximum severance payments, if:

$$p_f \{p_c(c_c + l_c) + (1 - p_c)[p_w(c_m + F) + (1 - p_w)c_m + l_t]\} + (1 - p_f)c_m < c_M$$

As for the worker, he or she chooses to challenge his or her dismissal ($p_f = 1$) if his or her expected gain at trial or at the conciliation stage is larger than the minimum severance payment:

$$p_w(c_m + F) + (1 - p_w)c_m - k_t > c_m \text{ or } c_c - k_c > c_m$$

Thus the worker chooses to go to court if the gain at trial is large enough ($p_w(c_m + F) + (1 - p_w)c_m - k_t > c_m$, that is $p_w > \overline{p_w} = \frac{k_t}{F}$). The worker would prefer the agreement ($p_c = 1$) than the trial when $p_w(c_m + F) + (1 - p_w)c_m - k_t < c_c - k_c$, i.e.

$$p_w < \overline{p_w} = \frac{c_c - c_m + k_t - k_c}{F}$$

Yet the firm can refuse the agreement.

On the firm side, the firm dismisses the worker offering the minimum cost if:

$$p_w(c_m + F) + (1 - p_w)c_m + l_t < c_M$$

that is:

$$p_w < p_w^{**} = \frac{c_M - c_m - l_t}{F}$$

We assume that the compensatory award $F$ is large enough so that when the firm is certain to lose at trial, it is less costly to pay the maximum severance payment. That is: $c_M < c_m + F + l_t$ and thus $p_w^{**} < 1$.

In addition, the firm accepts the conciliation only if it is less costly than going to trial, that is:

$$p_w(c_m + F) + (1 - p_w)c_m + l_t > c_c + l_c$$

which means:

$$p_w > p_w^* = \frac{c_c - c_m - l_t + l_c}{F}$$

In order a conciliation to exist, suing must be a credible threat to the employer. Therefore, we impose that $p_w^* < \overline{p_w}$ that is $c_c - c_m + l_c < k_t + l_t$. In addition, there must be a probability range where the worker is better off to conciliate than going to trial. We must have $\overline{p_w} < p_w$ that is $c_m < c_c - k_c$.
Finally, for the trial stage to exist, the firm must be better off in some probability range to go to trial rather than giving the compensatory award $c_M$ that protects against any suing:

$$\overline{p_w} < p_w^{**}.$$

To summarize, we have five assumptions:

**Assumptions:**

*Condition (1):* $k_t > c_c - c_m + l_c - l_t$: the cost of trial is sufficiently large ($p_w^* < \overline{p_w}$)

*Condition (2):* $c_c - k_c > c_m$: the gain for the worker at the conciliation stage is larger than the severance payment he or she receives in case of firing for a personal motive ($\overline{p_w} < \overline{p_w}$).

*Condition (3):* $c_c + l_c < c_M$: the cost for the firm at the conciliation stage is smaller than the severance payment received by the worker in case of firing for an economic motive.

Conditions (1), (2) and (3) taken together allow for the possibility of a **conciliation stage**.

*Condition (4):* The compensatory award $F$ is large enough so that when the firm is certain to lose at trial, it is less costly to pay the maximum severance payment. That is: $c_M < c_m + F + l_t$. It implies $p_w^{**} < 1$ and excludes an equilibrium in which the law has no deterrent effect, every worker being fired for a personal motive.

*Condition (5):* $c_c - k_c + l_c < c_M$: there is a probability range for a trial to exist. The firm is better off at trial than paying $c_M$.

**Result 1:**

Under these assumptions we end up with four regimes:

$$- p_f = 0 \text{ and } p_c = 0 \text{ if } p_w < \overline{p_w}$$

$$- p_f = 1 \text{ and } p_c = 1 \text{ if } \overline{p_w} < p_w < \overline{p_w} \text{ (with } p_w^* < \overline{p_w})$$

$$- p_f = 1 \text{ and } p_c = 0 \text{ if } \overline{p_w} < p_w < p_w^{**}$$

$$- \text{the firm pays } c_M \text{ if } p_w > p_w^{**}$$

For a given distribution $\Phi$ of case qualities $p_w$, the total firing cost for a firm is given by the area under the line in Figure 1:
$$ Cost = \int_{0}^{p_w} c_m d\Phi(p_w) + \int_{p_w}^{p_w} (c_c + l_c) d\Phi(p_w) + \int_{p_w}^{p_w^*} (p_w(c_m + F) + (1-p_w)c_m + l_t) d\Phi(p_w) + \int_{p_w^{**}}^{1} c_M d\Phi(p_w) $$

The number of filed cases is the number of cases with greater quality than $\overline{p_w}$ but lesser quality than $p_w^{**}$:

$$ Filed = \int_{p_w}^{p_w} d\Phi(p_w) + \int_{p_w}^{p_w^{**}} d\Phi(p_w) $$

The number of trials is the number of filed cases with greater quality than $\overline{p_w}$:

$$ Trials = \int_{p_w}^{p_w^{**}} d\Phi(p_w) $$

When the litigation cost for the firm $l_t$ increases, the only threshold which is impacted is $p_w^{**}$, which decreases ($\frac{\partial p_w^{**}}{\partial l_t} = -\frac{1}{F}$). Thus the numbers of filed cases and trials decrease. On the contrary, the total firing cost increases (see also Figure 2):

$$ \frac{\partial Filed}{\partial l_t} = \frac{\partial Trials}{\partial l_t} = \frac{\partial}{\partial l_t} \int_{p_w}^{p_w^{**}} d\Phi(p_w) = -\frac{1}{F} \varphi(p_w^{**}) < 0 $$

and

$$ \begin{aligned} \frac{\partial Cost}{\partial l_t} &= \frac{\partial}{\partial l_t} \int_{p_w}^{p_w^{**}} (p_w(c_m + F) + (1-p_w)c_m + l_t) d\Phi(p_w) + \frac{\partial}{\partial l_t} \int_{p_w^{**}}^{1} c_M d\Phi(p_w) \\ &= \int_{p_w}^{p_w^{**}} (p_w(c_m + F) + (1-p_w)c_m + l_t) \varphi^2(p_w) d\Phi(p_w) - \frac{1}{F} (p_w^{**}(c_m + F) + (1-p_w^{**})c_m + l_t) \varphi(p_w^{**}) \\ &\quad - \left(-\frac{1}{F}\right) c_M \varphi(p_w^{**}) \\ &= \int_{p_w}^{p_w^{**}} (p_w(c_m + F) + (1-p_w)c_m + l_t) \varphi^2(p_w) d\Phi(p_w) > 0 \end{aligned} $$

Thus we have:

**Result 2:**

If the litigation cost for the firm $l_t$ increases, the total firing cost increases, assuming that the distribution of the case quality is given. The numbers of filed cases and trials decrease, as well as the quality of the filed cases.

When the litigation cost for the worker $k_t$ increases, two thresholds are impacted: $\overline{p_w}$ and $\overline{p_w}$. They both increase ($\frac{\partial \overline{p_w}}{\partial k_t} = \frac{\partial \overline{p_w}}{\partial k_t} = \frac{1}{F}$). Thus the numbers of filed cases and of trials decrease:
$$ \frac{\partial Filed}{\partial k_t} = -\frac{1}{F} \varphi(\overline{p_w}) < 0 $$

$$ \frac{\partial Trials}{\partial k_t} = -\frac{1}{F} \varphi(\overline{p_w}) < 0 $$

and the total cost decrease as well (see also Figure 3):

$$ \begin{align*} \frac{\partial Cost}{\partial k_t} &= \frac{\partial}{\partial k_t} \int_{0}^{\overline{p_w}} c_m d\Phi(p_w) + \frac{\partial}{\partial k_t} \int_{\overline{p_w}}^{\overline{p_w}} (c_c + l_c) d\Phi(p_w) + \frac{\partial}{\partial k_t} \int_{\overline{p_w}}^{\overline{p_w}^*} (p_w(c_m + F) + (1-p_w)c_m + l_t) d\Phi(p_w) \\ &= \frac{1}{F} c_m \varphi(\overline{p_w}) + \frac{1}{F} (c_c + l_c) \varphi(\overline{p_w}) - \frac{1}{F} (c_c + l_c) \varphi(\overline{p_w}) - \frac{1}{F} (\overline{p_w}(c_m + F) + (1-\overline{p_w})c_m + l_t) \varphi(\overline{p_w}) \\ &= \frac{1}{F} (c_m - c_c + l_c) \varphi(\overline{p_w}) + \frac{1}{F} (l_c - k_t + k_c - l_t) \end{align*} $$

Under conditions (1) and (2),

$$ \frac{\partial Cost}{\partial k_t} < 0 $$

**Result 3:**

If the litigation cost for the worker $k_t$ increases, the total firing cost for the firm decreases. The numbers of filed cases and trials decrease.
<figure><img src="image_3.png" /><figcaption>Figure 2. Firing Cost, Case Outcomes and an Increase in the Litigation Cost for the Firm.</figcaption></figure>

<figure><img src="image_4.png" /></figure>
<figure><img src="image_5.png" /><figcaption>Figure 4. Location of the Universities Training Lawyers.</figcaption></figure>

<figure><img src="image_6.png" /></figure>

Note: The 'Départements' where there are universities training lawyers are in black.
<figure><img src="image_7.png" /><figcaption>Figure 6. Firing Cost, Case Outcomes and a Decrease in the Lawyers’ Costs.</figcaption></figure>

<figure><img src="image_8.png" /></figure>
<table><caption>**Table 1. Summary Statistics: Judicial Indicators, Job Flows and Lawyer Density.**</caption><thead><tr><th></th><th>Mean</th><th>Std.</th><th>Min</th><th>Max</th></tr></thead><tbody><tr><td><em>Judicial Indicators:</em></td><td></td><td></td><td></td><td></td></tr><tr><td>Filing rate</td><td>0.22</td><td>0.11</td><td>0.03</td><td>0.98</td></tr><tr><td>Conciliation rate</td><td>0.20</td><td>0.09</td><td>0.00</td><td>0.77</td></tr><tr><td>Trial rate</td><td>0.61</td><td>0.10</td><td>0.19</td><td>0.95</td></tr><tr><td>Worker Winning rate</td><td>0.45</td><td>0.09</td><td>0.09</td><td>0.93</td></tr><tr><td><em>Job Flows:</em></td><td></td><td></td><td></td><td></td></tr><tr><td>Job Destructions</td><td>0.16</td><td>0.04</td><td>0.07</td><td>0.52</td></tr><tr><td>Job Creations</td><td>0.16</td><td>0.06</td><td>0.05</td><td>0.71</td></tr><tr><td>Employment Growth rate</td><td>0.00</td><td>0.07</td><td>-0.63</td><td>0.43</td></tr><tr><td>Firm Exits (Extensive Margins)</td><td>0.10</td><td>0.05</td><td>0.01</td><td>0.66</td></tr><tr><td>Firm Entries (Extensive Margins)</td><td>0.09</td><td>0.04</td><td>0.02</td><td>0.47</td></tr><tr><td><em>Instrument:</em></td><td></td><td></td><td></td><td></td></tr><tr><td>Lawyer Density</td><td>0.0024</td><td>0.0047</td><td>0.0002</td><td>0.0464</td></tr></tbody></table>

Notes: Means of the jurisdiction\*year indicators, over the 264 jurisdictions and the years 1996-2003. Because cases can also be dropped, the sum of the trial rate and of the conciliation rate is smaller than 1.

<table><caption>**Table 2. First Stage Regressions: Effect of Lawyer Density on Judicial Indicators.**</caption><thead><tr><th></th><th>Filing rate</th><th>Conciliation rate</th><th>Trial rate</th><th>Worker Winning rate</th></tr></thead><tbody><tr><td>Lawyer density</td><td>10.390***<br>(1.629)</td><td>7.331***<br>(2.059)</td><td>-7.539***<br>(2.647)</td><td>-3.864***<br>(1.347)</td></tr><tr><td>R-squared</td><td>0.14</td><td>0.27</td><td>0.22</td><td>0.19</td></tr><tr><td>F-test of joint<br>significance (p-value)</td><td>40.68 (0.000)</td><td>12.67 (0.000)</td><td>8.11 (0.004)</td><td>8.21 (0.000)</td></tr></tbody></table>

Robust standard errors are between parentheses. \* significant at 10%; \*\* significant at 5%, \*\*\* significant at 1%. Observations are for 264 jurisdictions and for the years 1996-2003 (2,112 obs.). Each regression includes jurisdiction and year fixed effects, and local business cycle indicators. 1999 labor force of the jurisdictions is used as weights. Clusters: jurisdiction level. F is the F statistic of the joint significance of the variables.

<table><caption>**Table 3. Reduced-form Regression: Effect of Lawyer Density on Job Flows.**</caption><thead><tr><th></th><th>Job Destructions</th><th>Job Creations</th><th>Employment Growth</th><th>Firm Exits</th><th>Firm Entries</th></tr></thead><tbody><tr><td>Lawyer density</td><td>-6.250***<br>(1.041)</td><td>-1.053<br>(1.060)</td><td>5.197***<br>(1.440)</td><td>-3.320**<br>(1.289)</td><td>1.008<br>(1.160)</td></tr><tr><td>R-squared</td><td>0.42</td><td>0.46</td><td>0.56</td><td>0.48</td><td>0.41</td></tr></tbody></table>

Robust standard errors are between parentheses. \* significant at 10%; \*\* significant at 5%, \*\*\* significant at 1%. Observations are for 264 jurisdictions and for the years 1996-2003 (2,112 obs.). Each regression includes jurisdiction and year fixed effects, and local business cycle indicators. 1999 labor force of the jurisdictions is used as weights. Clusters: jurisdiction level.
<table><caption>**Table 4a.** Judicial Indicators on Job Flows: OLS Estimates without any Controls for Business Cycle.</caption><thead><tr><th rowspan="2"></th><th colspan="5">Extensive Margin</th></tr><tr><th>Job Destructions</th><th>Job Creations</th><th>Employment Growth</th><th>Firm Exits</th><th>Firm Entries</th></tr></thead><tbody><tr><th>Filing rate</th><td>0.087***<br>(0.024)</td><td>-0.024*<br>(0.015)</td><td>-0.111***<br>(0.030)</td><td>0.086***<br>(0.023)</td><td>-0.028**<br>(0.014)</td></tr><tr><th>R-squared</th><td>0.01</td><td>0.00</td><td>0.01</td><td>0.01</td><td>0.003</td></tr><tr><th>Conciliation rate</th><td>0.179***<br>(0.025)</td><td>-0.107***<br>(0.017)</td><td>-0.287***<br>(0.031)</td><td>0.211***<br>(0.025)</td><td>-0.060***<br>(0.013)</td></tr><tr><th>R-squared</th><td>0.06</td><td>0.04</td><td>0.08</td><td>0.09</td><td>0.014</td></tr><tr><th>Trial rate</th><td>-0.103***<br>(0.021)</td><td>0.064***<br>(0.016)</td><td>0.167***<br>(0.031)</td><td>-0.141***<br>(0.018)</td><td>0.029**<br>(0.014)</td></tr><tr><th>R-squared</th><td>0.03</td><td>0.02</td><td>0.04</td><td>0.05</td><td>0.004</td></tr><tr><th>Worker Winning rate</th><td>-0.117***<br>(0.023)</td><td>0.081***<br>(0.017)</td><td>0.198***<br>(0.033)</td><td>-0.152***<br>(0.022)</td><td>0.028**<br>(0.014)</td></tr><tr><th>R-squared</th><td>0.03</td><td>0.02</td><td>0.04</td><td>0.05</td><td>0.003</td></tr></tbody></table>

Robust standard errors are between parentheses. * significant at 10%; ** significant at 5%, ***significant at 1%. Observations are for 264 jurisdictions and for the years 1996-2003 (2,112 obs.). Each regression includes jurisdiction fixed effects but no year fixed effects and no local business cycle indicators. 1999 labor force of the jurisdictions is used as weights. Clusters: jurisdiction level.

<table><caption>**Table 4b.** Judicial Indicators on Job Flows: OLS Estimates with all Controls.</caption><thead><tr><th rowspan="2"></th><th colspan="5">Extensive Margin</th></tr><tr><th>Job Destructions</th><th>Job Creations</th><th>Employment Growth</th><th>Firm Exits</th><th>Firm Entries</th></tr></thead><tbody><tr><th>Filing rate</th><td>0.017<br>(0.019)</td><td>-0.007<br>(0.013)</td><td>-0.024<br>(0.021)</td><td>0.005<br>(0.017)</td><td>-0.009<br>(0.011)</td></tr><tr><th>R-squared</th><td>0.43</td><td>0.48</td><td>0.59</td><td>0.46</td><td>0.45</td></tr><tr><th>Conciliation rate</th><td>-0.044**<br>(0.022)</td><td>-0.005<br>(0.013)</td><td>0.039*<br>(0.022)</td><td>-0.035*<br>(0.021)</td><td>-0.005<br>(0.012)</td></tr><tr><th>R-squared</th><td>0.40</td><td>0.47</td><td>0.56</td><td>0.46</td><td>0.42</td></tr><tr><th>Trial rate</th><td>0.036**<br>(0.018)</td><td>0.004<br>(0.011)</td><td>-0.032<br>(0.021)</td><td>0.025<br>(0.017)</td><td>0.003<br>(0.010)</td></tr><tr><th>R-squared</th><td>0.40</td><td>0.47</td><td>0.56</td><td>0.46</td><td>0.42</td></tr><tr><th>Worker Winning rate</th><td>0.038**<br>(0.018)</td><td>0.007<br>(0.012)</td><td>-0.031<br>(0.021)</td><td>0.028<br>(0.018)</td><td>0.008<br>(0.010)</td></tr><tr><th>R-squared</th><td>0.40</td><td>0.47</td><td>0.56</td><td>0.46</td><td>0.42</td></tr></tbody></table>

Robust standard errors are between parentheses. * significant at 10%; ** significant at 5%, ***significant at 1%. Observations are for 264 jurisdictions and for the years 1996-2003 (2,112 obs.). Each regression includes jurisdiction and year fixed effects, and local business cycle indicators. 1999 labor force of the jurisdictions is used as weights. Clusters: jurisdiction level.

<table><caption>**Table 5.** Judicial Indicators on Job Flows: 2SLS Estimates.</caption><thead><tr><th rowspan="2"></th><th colspan="5">Extensive Margins</th></tr><tr><th>Job Destructions</th><th>Job Creations</th><th>Employment Growth</th><th>Firm Exits</th><th>Firm Entries</th></tr></thead><tbody><tr><th>Filing rate</th><td>-0.674***<br>(0.179)</td><td>-0.272**<br>(0.131)</td><td>0.402*<br>(0.214)</td><td>-0.322*<br>(0.179)</td><td>-0.0260<br>(0.128)</td></tr><tr><th>R-squared</th><td>0.21</td><td>0.31</td><td>0.46</td><td>0.30</td><td>0.45</td></tr><tr><th>Conciliation rate</th><td>-0.853***<br>(0.297)</td><td>-0.144<br>(0.142)</td><td>0.709**<br>(0.314)</td><td>-0.453*<br>(0.249)</td><td>0.138<br>(0.171)</td></tr><tr><th>R-squared</th><td>0.44</td><td>0.41</td><td>0.25</td><td>0.23</td><td>0.35</td></tr><tr><th>Trial rate</th><td>0.829**<br>(0.344)</td><td>0.140<br>(0.168)</td><td>-0.689**<br>(0.278)</td><td>0.440*<br>(0.243)</td><td>-0.134<br>(0.142)</td></tr><tr><th>R-squared</th><td>0.73</td><td>0.40</td><td>0.13</td><td>0.13</td><td>0.33</td></tr><tr><th>Worker Winning rate</th><td>1.617***<br>(0.608)</td><td>0.273<br>(0.305)</td><td>-1.345**<br>(0.541)</td><td>0.859**<br>(0.426)</td><td>-0.261<br>(0.297)</td></tr><tr><th>R-squared</th><td>0.31</td><td>0.28</td><td>0.19</td><td>0.65</td><td>0.17</td></tr></tbody></table>

Robust standard errors are between parentheses. * significant at 10%; ** significant at 5%, ***significant at 1%. Observations are for 264 jurisdictions and for the years 1996-2003 (2,112 obs.). Each regression includes jurisdiction and year fixed effects, and local business cycle indicators. 1999 labor force of the jurisdictions is used as weights. Clusters: jurisdiction level.
<table><caption>Table 6a. Impact of the Conciliation Rate: Difference-in-Difference Estimates of the Brenner Experiment.</caption><thead><tr><th></th><th>Job Destructions</th><th>Job Creations</th><th>Employment Growth</th><th>Conciliation rate</th></tr></thead><tbody><tr><td colspan="5">Treatment Group: Jurisdiction of Grenoble</td></tr><tr><td colspan="5">Control Group: Rest of France</td></tr><tr><td colspan="5">Observations = 3432 (264 jurisdictions)</td></tr><tr><td>Grenoble*Post1998</td><td>-0.037***<br>(0.002)</td><td>-0.030***<br>(0.002)</td><td>0.007***<br>(0.002)</td><td>0.083***<br>(0.004)</td></tr><tr><td>R-squared</td><td>0.33</td><td>0.38</td><td>0.46</td><td>0.11</td></tr><tr><td colspan="5">Control Group: Jurisdictions of Similar Size</td></tr><tr><td colspan="5">Observations = 494 (38 jurisdictions)</td></tr><tr><td>Grenoble*Post1998</td><td>-0.041***<br>(0.003)</td><td>-0.035***<br>(0.004)</td><td>0.006<br>(0.004)</td><td>0.064***<br>(0.006)</td></tr><tr><td>R-squared</td><td>0.38</td><td>0.50</td><td>0.56</td><td>0.30</td></tr><tr><td colspan="5">Control Group: Jurisdictions within Contiguous Départements</td></tr><tr><td colspan="5">Observations = 416 (32 jurisdictions)</td></tr><tr><td>Grenoble*Post1998</td><td>-0.021***<br>(0.004)</td><td>-0.017***<br>(0.003)</td><td>0.004<br>(0.004)</td><td>0.071***<br>(0.008)</td></tr><tr><td>R-squared</td><td>0.41</td><td>0.62</td><td>0.60</td><td>0.18</td></tr></tbody></table>

Robust standard errors are between parentheses. * significant at 10%; ** significant at 5%, ***significant at 1%. Observations are for the years 1991-2003. Each regression includes jurisdiction and year fixed effects. Clusters: jurisdiction level. Grenoble is a variable equal to 1 for the jurisdiction of Grenoble. Post1998 is a variable equal to 1 if the year of observation is after 1998. Grenoble*Post1998 is a variable equal to 1 for the jurisdiction of Grenoble after 1998. This is the difference-in-difference variable of interest.

<table><caption>Table 6b. Judicial Indicators on Job Flows: 2SLS Estimates using the Brenner Experiment.</caption><thead><tr><th></th><th>Job Destructions</th><th>Job Creations</th><th>Employment Growth</th></tr></thead><tbody><tr><td colspan="4">Control Group: Rest of France</td></tr><tr><td colspan="4">Observations = 3432 (264 jurisdictions)</td></tr><tr><td>Conciliation rate</td><td>-0.445***<br>(0.031)</td><td>-0.357***<br>(0.027)</td><td>0.088***<br>(0.021)</td></tr><tr><td>R-squared</td><td>0.03</td><td>0.07</td><td>0.46</td></tr><tr><td colspan="4">Control Group: Jurisdictions of Similar Size</td></tr><tr><td colspan="4">Observations = 494 (38 jurisdictions)</td></tr><tr><td>Conciliation rate</td><td>-0.645***<br>(0.083)</td><td>-0.548***<br>(0.079)</td><td>0.097<br>(0.060)</td></tr><tr><td>R-squared</td><td>0.00</td><td>0.13</td><td>0.56</td></tr><tr><td colspan="4">Control Group: Jurisdictions within Contiguous Départements</td></tr><tr><td colspan="4">Observations = 416 (32 jurisdictions)</td></tr><tr><td>Conciliation rate</td><td>-0.289***<br>(0.059)</td><td>-0.235***<br>(0.045)</td><td>0.054<br>(0.056)</td></tr><tr><td>R-squared</td><td>0.24</td><td>0.54</td><td>0.60</td></tr></tbody></table>

Robust standard errors are between parentheses. * significant at 10%; ** significant at 5%, ***significant at 1%. Observations are for the years 1991-2003. Each regression includes jurisdiction and year fixed effects. Clusters: jurisdiction level. Grenoble is a variable equal to 1 for the jurisdiction of Grenoble. Post1998 is a variable equal to 1 if the year of observation is after 1998. Grenoble*Post1998 is a variable equal to 1 for the jurisdiction of Grenoble after 1998. This variable is used as an instrumental variable.
Appendix Tables

<table><caption>Table A.1. Judicial Indicators and the Business Cycle.</caption><thead><tr><th></th><th>Filing rate</th><th>Conciliation rate</th><th>Trial rate</th><th>Worker Winning rate</th></tr></thead><tbody><tr><td>Unemployment rate</td><td>0.897***<br>(0.108)</td><td>1.177***<br>(0.118)</td><td>-1.435***<br>(0.141)</td><td>-1.353***<br>(0.135)</td></tr><tr><td>R-squared</td><td>0.04</td><td>0.06</td><td>0.09</td><td>0.08</td></tr></tbody></table>

Robust standard errors are between parentheses. * significant at 10%; ** significant at 5%, ***significant at 1%. Observations are for 264 jurisdictions and for the years 1996-2003 (2,112 obs.). Each regression includes jurisdiction and year fixed effects. 1999 labor force of the jurisdictions is used as weights. Clusters: jurisdiction level.

<table><caption>Table A.2. The Impact of Past Job Flows on Lawyer Density.</caption><thead><tr><th></th><th>Lawyers</th></tr></thead><tbody><tr><td>Job D destructions (-1)</td><td>-0.0004<br>(0.0003)</td></tr><tr><td>Job D destructions (-2)</td><td>-0.0002<br>(0.0002)</td></tr><tr><td>R-squared</td><td>0.11</td></tr><tr><td>Job C creations (-1)</td><td>0.0001<br>(0.0004)</td></tr><tr><td>Job C creations (-2)</td><td>0.0006<br>(0.0006)</td></tr><tr><td>R-squared</td><td>0.11</td></tr><tr><td>Employment G rowth (-1)</td><td>0.0003*<br>(0.0002)</td></tr><tr><td>Employment G rowth (-2)</td><td>0.0005<br>(0.0003)</td></tr><tr><td>R-squared</td><td>0.11</td></tr><tr><td>Observations</td><td>2112</td></tr></tbody></table>

Robust standard errors are between parentheses. * significant at 10%; ** significant at 5%, ***significant at 1%. Each regression includes jurisdiction and year fixed effects. 1999 labor force of the jurisdictions is used as weights. Clusters: jurisdiction level.
<table>
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    <td>A. MOUROUGANE<br/>Crédibilité, indépendance et politique monétaire<br/>Une revue de la littérature</td>
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    <td>G 9912</td>
    <td>B. SALANIÉ<br/>Une maquette analytique de long terme du<br/>marché du travail</td>
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    <td>Ch. GIANELLA<br/>Une estimation de l'élasticité de l'emploi peu<br/>qualifié à son coût</td>
  </tr>
</table>

<table>
  <tr>
    <td>G 9913</td>
    <td>Division « Redistribution et Politiques Sociales »<br/>Le modèle de microsimulation dynamique<br/>DESTINIE</td>
  </tr>
  <tr>
    <td>G 9914</td>
    <td>E. DUGUET<br/>Macro-commandes SAS pour l'économétrie des<br/>panels et des variables qualitatives</td>
  </tr>
  <tr>
    <td>G 9915</td>
    <td>R. DUHAUTOIS<br/>Évolution des flux d'emplois en France entre<br/>1990 et 1996 : une étude empirique à partir du<br/>fichier des bénéfices réels normaux (BRN)</td>
  </tr>
  <tr>
    <td>G 9916</td>
    <td>J.Y. FOURNIER<br/>Extraction du cycle des affaires : la méthode de<br/>Baxter et King</td>
  </tr>
  <tr>
    <td>G 9917</td>
    <td>B. CRÉPON - R. DESPLATZ - J. MAIRESSE<br/>Estimating price cost margins, scale economies<br/>and workers' bargaining power at the firm level</td>
  </tr>
  <tr>
    <td>G 9918</td>
    <td>Ch. GIANELLA - Ph. LAGARDE<br/>Productivity of hours in the aggregate production<br/>function: an evaluation on a panel of French<br/>firms from the manufacturing sector</td>
  </tr>
  <tr>
    <td>G 9919</td>
    <td>S. AUDRIC - P. GIVORD - C. PROST<br/>Évolution de l'emploi et des coûts par quali-<br/>fication entre 1982 et 1996</td>
  </tr>
  <tr>
    <td>G 2000/01</td>
    <td>R. MAHIEU<br/>Les déterminants des dépenses de santé : une<br/>approche macroéconomique</td>
  </tr>
  <tr>
    <td>G 2000/02</td>
    <td>C. ALLARD-PRIGENT - H. GUILMEAU -<br/>A. QUINET<br/>The real exchange rate as the relative price of<br/>nontrables in terms of tradables: theoretical<br/>investigation and empirical study on French data</td>
  </tr>
  <tr>
    <td>G 2000/03</td>
    <td>J.-Y. FOURNIER<br/>L'approximation du filtre passe-bande proposée<br/>par Christiano et Fitzgerald</td>
  </tr>
  <tr>
    <td>G 2000/04</td>
    <td>Bilan des activités de la DESE - 1999</td>
  </tr>
  <tr>
    <td>G 2000/05</td>
    <td>B. CREPON - F. ROSENWALD<br/>Investissement et contraintes de financement : le<br/>poids du cycle<br/>Une estimation sur données françaises</td>
  </tr>
  <tr>
    <td>G 2000/06</td>
    <td>A. FLIPO<br/>Les comportements matrimoniaux de fait</td>
  </tr>
  <tr>
    <td>G 2000/07</td>
    <td>R. MAHIEU - B. SÉDILLOT<br/>Microsimulations of the retirement decision: a<br/>supply side approach</td>
  </tr>
  <tr>
    <td>G 2000/08</td>
    <td>C. AUDENIS - C. PROST<br/>Déficit conjoncturel : une prise en compte des<br/>conjonctures passées</td>
  </tr>
  <tr>
    <td>G 2000/09</td>
    <td>R. MAHIEU - B. SÉDILLOT<br/>Équivalent patrimonial de la rente et souscription<br/>de retraite complémentaire</td>
  </tr>
  <tr>
    <td>G 2000/10</td>
    <td>R. DUHAUTOIS<br/>Ralentissement de l'investissement : petites ou<br/>grandes entreprises ? industrie ou tertiaire ?</td>
  </tr>
  <tr>
    <td>G 2000/11</td>
    <td>G. LAROQUE - B. SALANIÉ<br/>Temps partiel féminin et incitations financières à<br/>l'emploi</td>
  </tr>
  <tr>
    <td>G 2000/12</td>
    <td>Ch. GIANELLA<br/>Local unemployment and wages</td>
  </tr>
  <tr>
    <td>G 2000/13</td>
    <td>B. CREPON - Th. HECKEL<br/>Informatisation en France : une évaluation à<br/>partir de données individuelles</td>
  </tr>
</table>
- Computerization in France: an evaluation based on individual company data

G2001/01 F. LEQUILLER

- La nouvelle économie et la mesure de la croissance du PIB

- The new economy and the measurement of GDP growth

G2001/02 S. AUDRIC

La reprise de la croissance de l'emploi profonde-t-elle aussi aux non-diplômés ?

G2001/03 I. BRAUN-LEMAIRE

Évolution et répartition du surplus de productivité

G2001/04 A. BEAUDU - Th. HECKEL

Le canal du crédit fonctionne-t-il en Europe ? Une étude de l'hétérogénéité des comportements d'investissement à partir de données de bilan agrégées

G2001/05 C. AUDENIS - P. BISCOURP -

N. FOURCADE - O. LOISEL

Testing the augmented Solow growth model: An empirical reassessment using panel data

G2001/06 R. MAHIEU - B. SÉDILLOT

Départ à la retraite, irréversibilité et incertitude

G2001/07 Bilan des activités de la DESE - 2000

G2001/08 J. Ph. GAUDEMET

Les dispositifs d'acquisition à titre facultatif d'annuités viagères de retraite

G2001/09 B. CRÉPON - Ch. GIANELLA

Fiscalité, coût d'usage du capital et demande de facteurs : une analyse sur données individuelles

G2001/10 B. CRÉPON - R. DESPLATZ

Évaluation des effets des dispositifs d'allégements de charges sociales sur les bas salaires

G2001/11 J.-Y. FOURNIER

Comparaison des salaires des secteurs public et privé

G2001/12 J.-P. BERTHIER - C. JAULENT

R. CONVENEVOLE - S. PISANI
Une méthodologie de comparaison entre consommations intermédiaires de source fiscale et de comptabilité nationale

G2001/13 P. BISCOURP - Ch. GIANELLA

Substitution and complementarity between capital, skilled and less skilled workers: an analysis at the firm level in the French manufacturing industry

G2001/14 I. ROBERT-BOBEE

Modelling demographic behaviours in the French microsimulation model Destinie: An analysis of future change in completed fertility

G2001/15 J.-P. ZOYEM

Diagnostic sur la pauvreté et calendrier de revenus : le cas du "Panel européen des ménages"

G2001/16 J.-Y. FOURNIER - P. GIVORD

La réduction des taux d'activité aux âges extrêmes, une spécificité française ?

G2001/17 C. AUDENIS - P. BISCOURP - N. RIEDINGER

Existe-t-il une asymétrie dans la transmission du prix du brut aux prix des carburants ?

G2002/01 F. MAGNIEN - J.-L. TAVERNIER - D. THESMAR

Les statistiques internationales de PIB par habitant en standard de pouvoir d'achat : une analyse des résultats

G2002/02 Bilan des activités de la DESE - 2001

G2002/03 B. SÉDILLOT - E. WALRAET

La cessation d'activité au sein des couples : y a-t-il interdépendance des choix ?

G2002/04 G. BRILHAULT

- Rétroposition des séries de FBCF et calcul du capital fixe en SEC-95 dans les comptes nationaux français

- Retroposition of the investment series (GFCF) and estimation of fixed capital stocks on the ESA-95 basis for the French balance sheets

G2002/05 P. BISCOURP - B. CRÉPON - T. HECKEL - N.

RIEDINGER
How do firms respond to cheaper computers? Microeconomic evidence for France based on a production function approach

G2002/06 C. AUDENIS - J. DEROYON - N. FOURCADE

L'impact des nouvelles technologies de l'information et de la communication sur l'économie française - un bouclage macro-économique

G2002/07 J. BARDAJI - B. SÉDILLOT - E. WALRAET

Évaluation de trois réformes du Régime Général d'assurance vieillesse à l'aide du modèle de microsimulation DESTINIE

G2002/08 J.-P. BERTHIER

Réflexions sur les différentes notions de volume dans les comptes nationaux : comptes aux prix d'une année fixe ou aux prix de l'année précédente, séries chaînées

G2002/09 F. HILD

Les soldes d'opinion résument-ils au mieux les réponses des entreprises aux enquêtes de conjoncture ?

G2002/10 I. ROBERT-BOBÉE

Les comportements démographiques dans le modèle de microsimulation Destinie - Une comparaison des estimations issues des enquêtes Jeunes et Carrières 1997 et Histoire Familiale 1999

G2002/11 J.-P. ZOYEM

La dynamique des bas revenus : une analyse des entrées-sorties de pauvreté

G2002/12 F. HILD

Prévisions d'inflation pour la France

G2002/13 M. LECLAIR

Réduction du temps de travail et tensions sur les facteurs de production

G2002/14 E. WALRAET - A. VINCENT

- Analyse de la redistribution intragénérationnelle dans le système de retraite des salariés du privé - Une approche par microsimulation

- Intragenerational distributional analysis in the french private sector pension scheme - A microsimulation approach

G2002/15 P. CHONE - D. LE BLANC - I. ROBERT-BOBEE
Offre de travail féminine et garde des jeunes enfants

G2002/16 F. MAUREL - S. GREGOIR

Les indices de compétitivité des pays : interprétation et limites

G2003/01 N. RIEDINGER - E. HAUVY

Le coût de dépollution atmosphérique pour les entreprises françaises : Une estimation à partir de données individuelles

G2003/02 P. BISCOURP et F. KRAMARZ

Création d'emplois, destruction d'emplois et internationalisation des entreprises industrielles françaises : une analyse sur la période 1986-1992

G2003/03 Bilan des activités de la DESE - 2002

G2003/04 P.-O. BEFFY - J. DEROYON -

N. FOURCADE - S. GREGOIR - N. LAÎB - B. MONFORT

Évolutions démographiques et croissance : une projection macro-économique à l'horizon 2020

G2003/05 P. AUBERT

La situation des salariés de plus de cinquante ans dans le secteur privé

G2003/06 P. AUBERT - B. CRÉPON

Âge, salaire et productivité

La productivité des salariés décline-t-elle en fin de carrière ?

G2003/07 H. BARON - P.O. BEFFY - N. FOURCADE - R. MAHIEU

Le ralentissement de la productivité du travail au cours des années 1990

G2003/08 P.-O. BEFFY - B. MONFORT

Patrimoine des ménages, dynamique d'allocation et comportement de consommation

G2003/09 P. BISCOURP - N. FOURCADE

Peut-on mettre en évidence l'existence de rigidités à la baisse des salaires à partir de données individuelles ? Le cas de la France à la fin des années 90

G2003/10 M. LECLAIR - P. PETIT

Présence syndicale dans les firmes : quel impact sur les inégalités salariales entre les hommes et les femmes ?

G2003/11 P.-O. BEFFY - X. BONNET - M. DARRACQ-PARIES - B. MONFORT

MZE: a small macro-model for the euro area

G2004/01 P. AUBERT - M. LECLAIR

La compétitivité exprimée dans les enquêtes trimestrielles sur la situation et les perspectives dans l'industrie

G2004/02 M. DUÉE - C. REBILLARD

La dépendance des personnes âgées : une projection à long terme

G2004/03 S. RASPILLER - N. RIEDINGER

Régulation environnementale et choix de localisation des groupes français

G2004/04 A. NABOULET - S. RASPILLER

Les déterminants de la décision d'investir : une approche par les perceptions subjectives des firmes

G2004/05 N. RAGACHE

La déclaration des enfants par les couples non mariés est-elle fiscalement optimale ?

G2004/06 M. DUÉE

L'impact du chômage des parents sur le devenir scolaire des enfants

G2004/07 P. AUBERT - E. CAROLI - M. ROGER

New Technologies, Workplace Organisation and the Age Structure of the Workforce: Firm-Level Evidence

G2004/08 E. DUGUET - C. LELARGE

Les brevets accroissent-ils les incitations privées à innover ? Un examen microéconométrique

G2004/09 S. RASPILLER - P. SILLARD

Affiliating versus Subcontracting: the Case of Multinationals

G2004/10 J. BOISSINOT - C. L'ANGEVIN - B. MONFORT

Public Debt Sustainability: Some Results on the French Case

G2004/11 S. ANANIAN - P. AUBERT

Travailleurs âgés, nouvelles technologies et changements organisationnels : un réexamen à partir de l'enquête « REPONSE »

G2004/12 X. BONNET - H. PONCET

Structures de revenus et propensions différentes à consommer - Vers une équation de consommation des ménages plus robuste en prévision pour la France

G2004/13 C. PICART

Évaluer la rentabilité des sociétés non financières

G2004/14 J. BARDAJI - B. SÉDILLOT - E. WALRAET

Les retraites du secteur public : projections à l'horizon 2040 à l'aide du modèle de microsimulation DESTINIE

G2005/01 S. BUFFETEAU - P. GODEFROY

Conditions de départ en retraite selon l'âge de fin d'études : analyse prospective pour les générations 1945 a1974

G2005/02 C. AFSA - S. BUFFETEAU

L'évolution de l'activité féminine en France : une approche par pseudo-panel

G2005/03 P. AUBERT - P. SILLARD

Délocalisations et réductions d'effectifs dans l'industrie française

G2005/04 M. LECLAIR - S. ROUX

Mesure et utilisation des emplois instables dans les entreprises

G2005/05 C. L'ANGEVIN - S. SERRAVALLE

Performances à l'exportation de la France et de l'Allemagne - Une analyse par secteur et destination géographique

G2005/06 Bilan des activités de la Direction des Études et Synthèses Economiques - 2004

G2005/07 S. RASPILLER

La concurrence fiscale : principaux enseignements de l'analyse économique

G2005/08 C. L'ANGEVIN - N. LAÎB

Éducation et croissance en France et dans un panel de 21 pays de l'OCDE

G2005/09 N. FERRARI

Prévoir l'investissement des entreprises
Un indicateur des révisions dans l'enquête de conjoncture sur les investissements dans l'industrie.
G2005/10 P.-O. BEFFY - C. L'ANGEVIN
Chômage et boucle prix-salaires : apport d'un modèle « qualifiés/peu qualifiés »

G2005/11 B. HEITZ
A two-states Markov-switching model of inflation in France and the USA: credible target VS inflation spiral

G2005/12 O. BIAU - H. ERKEL-ROUSSE - N. FERRARI
Réponses individuelles aux enquêtes de conjoncture et prévision macroéconomiques : Exemple de la prévision de la production manufacturière

G2005/13 P. AUBERT - D. BLANCHET - D. BLAU
The labour market after age 50: some elements of a Franco-American comparison

G2005/14 D. BLANCHET - T. DEBRAND - P. DOURGNON - P. POLLET
L'enquête SHARE : présentation et premiers résultats de l'édition française

G2005/15 M. DUÉE
La modélisation des comportements démographiques dans le modèle de microsimulation DESTINE

G2005/16 H. RAOUI - S. ROUX
Étude de simulation sur la participation versée aux salariés par les entreprises

G2006/01 C. BONNET - S. BUFFETEAU - P. GODEFROY
Disparités de retraite de droit direct entre hommes et femmes : quelles évolutions ?

G2006/02 C. PICART
Les gazelles en France

G2006/03 P. AUBERT - B. CRÉPON - P. ZAMORA
Le rendement apparent de la formation continue dans les entreprises : effets sur la productivité et les salaires

G2006/04 J.-F. OUVRARD - R. RATHELOT
Demographic change and unemployment: what do macroeconomic models predict?

G2006/05 D. BLANCHET - J.-F. OUVRARD
Indicateurs d'engagements implicites des systèmes de retraite : chiffrages, propriétés analytiques et réactions à des chocs démographiques types

G2006/06 G. BIAU - O. BIAU - L. ROUVIERE
Nonparametric Forecasting of the Manufacturing Output Growth with Firm-level Survey Data

G2006/07 C. AFSA - P. GIVORD
Le rôle des conditions de travail dans les absences pour maladie

G2006/08 P. SILLARD - C. L'ANGEVIN - S. SERRAVALLE
Performances comparées à l'exportation de la France et de ses principaux partenaires
Une analyse structurelle sur 12 ans

G2006/09 X. BOUTIN - S. QUANTIN
Une méthodologie d'évaluation comptable du coût du capital des entreprises françaises : 1984-2002

G2006/10 C. AFSA
L'estimation d'un coût implicite de la pénibilité du travail chez les travailleurs âgés

G2006/11 C. LELARGE
Les entreprises (industrielles) françaises sont-elles à la frontière technologique ?

G2006/12 O. BIAU - N. FERRARI
Théorie de l'opinion
Faut-il pondérer les réponses individuelles ?

G2006/13 A. KOUBI - S. ROUX
Une réinterprétation de la relation entre productivité et inégalités salariales dans les entreprises

G2006/14 R. RATHELOT - P. SILLARD
The impact of local taxes on plants location decision

G2006/15 L. GONZALEZ - C. PICART
Diversification, centrage et poids des activités de support dans les groupes (1993-2000)

G2007/01 D. SRAER
Allègements de cotisations patronales et dynamique salariale

G2007/02 V. ALBOUY - L. LEQUIEN
Les rendements non monétaires de l'éducation : le cas de la santé

G2007/03 D. BLANCHET - T. DEBRAND
Aspiration à la retraite, santé et satisfaction au travail : une comparaison européenne

G2007/04 M. BARLET - L. CRUSSON
Quel impact des variations du prix du pétrole sur la croissance française ?

G2007/05 C. PICART
Flux d'emploi et de main-d'œuvre en France : un réexamen

G2007/06 V. ALBOUY - C. TAVAN
Massification et démocratisation de l'enseignement supérieur en France

G2007/07 T. LE BARBANCHON
The Changing response to oil price shocks in France: a DSGE type approach

G2007/08 T. CHANEY - D. SRAER - D. THESMAR
Collateral Value and Corporate Investment Evidence from the French Real Estate Market

G2007/09 J. BOISSINOT
Consumption over the Life Cycle: Facts for France

G2007/10 C. AFSA
Interpréter les variables de satisfaction : l'exemple de la durée du travail

G2007/11 R. RATHELOT - P. SILLARD
Zones Franches Urbaines : quels effets sur l'emploi salarié et les créations d'établissements ?

G2007/12 V. ALBOUY - B. CRÉPON
Aléa moral en santé : une évaluation dans le cadre du modèle causal de Rubin

G2008/01 C. PICART
Les PME françaises : rentables mais peu dynamiques

G2008/02 P. BISCOURP - X. BOUTIN - T. VERGÉ
The Effects of Retail Regulations on Prices Evidence form the Loi Galland

G2008/03 Y. BARBESOL - A. BRIANT
Économies d'agglomération et productivité des entreprises : estimation sur données individuelles françaises

G2008/04 D. BLANCHET - F. LE GALLO
Les projections démographiques : principaux mécanismes et retour sur l'expérience française

G2008/05 D. BLANCHET - F. TOUTLEMONDE
Évolutions démographiques et déformation du cycle de vie active : quelles relations ?

G2008/06 M. BARLET - D. BLANCHET - L. CRUSSON
Internationalisation et flux d'emplois : que dit une approche comptable ?

G2008/07 C. LELARGE - D. SRAER - D. THESMAR
Entrepreneurship and Credit Constraints - Evidence from a French Loan Guarantee Program

G2008/08 X. BOUTIN - L. JANIN
Are Prices Really Affected by Mergers?

G2008/09 M. BARLET - A. BRIANT - L. CRUSSON
Concentration géographique dans l'industrie manufacturière et dans les services en France : une approche par un indicateur en continu

G2008/10 M. BEFFY - É. COUDIN - R. RATHELOT
Who is confronted to insecure labor market histories? Some evidence based on the French labor market transition

G2008/11 M. ROGER - E. WALRAET
Social Security and Well-Being of the Elderly: the Case of France

G2008/12 C. AFSA
Analyser les composantes du bien-être et de son évolution
Une approche empirique sur données individuelles

G2008/13 M. BARLET - D. BLANCHET - T. LE BARBANCHON
Microsimplifier le marché du travail : un prototype

G2009/01 P.-A. PIONNIER
Le partage de la valeur ajoutée en France, 1949-2007

G2009/02 Laurent CLAVEL - Christelle MINODIER
A Monthly Indicator of the French Business Climate

G2009/03 H. ERKEL-ROUSSE - C. MINODIER
Do Business Tendency Surveys in Industry and Services Help in Forecasting GDP Growth?
A Real-Time Analysis on French Data

G2009/04 P. GIVORD - L. WILNER
Les contrats temporaires : trappe ou marché-pied vers l'emploi stable ?

G2009/05 G. LALANNE - P.-A. PIONNIER - O. SIMON
Le partage des fruits de la croissance de 1950 à 2008 : une approche par les comptes de surplus

G2009/06 L. DAVEZIES - X. D'HAULTFOEUILLE
Faut-il pondérer ?... Ou l'éternelle question de l'économètre confronté à des données d'enquête

G2009/07 S. QUANTIN - S. RASPILLER - S. SERRAVALLE
Commerce intragroupe, fiscalité et prix de transferts : une analyse sur données françaises

G2009/08 M. CLERC - V. MARCUS
Élasticités-prix des consommations énergétiques des ménages

G2009/09 G. LALANNE - E. POULIQUEN - O. SIMON
Prix du pétrole et croissance potentielle à long terme

G2009/10 D. BLANCHET - J. LE CACHEUX - V. MARCUS
Adjusted net savings and other approaches to sustainability: some theoretical background

G2009/11 V. BELLAMY - G. CONSALES - M. FESSEAU - S. LE LAIDIER - É. RAYNAUD
Une décomposition du compte des ménages de la comptabilité nationale par catégorie de ménage en 2003

G2009/12 J. BARDAJI - F. TALLET
Detecting Economic Regimes in France: a Qualitative Markov-Switching Indicator Using Mixed Frequency Data

G2009/13 R. AEBERHARDT - D. FOUGÈRE - R. RATHELOT
Discrimination à l'embauche : comment exploiter les procédures de testing ?

G2009/14 Y. BARBESOL - P. GIVORD - S. QUANTIN
Partage de la valeur ajoutée, approche par données microéconomiques

G2009/15 I. BUONO - G. LALANNE
The Effect of the Uruguay round on the Intensive and Extensive Margins of Trade

G2010/01 C. MINODIER
Avantages comparés des séries des premières valeurs publiées et des séries des valeurs révisées - Un exercice de prévision en temps réel de la croissance trimestrielle du PIB en France

G2010/02 V. ALBOUY - L. DAVEZIES - T. DEBRAND
Health Expenditure Models: a Comparison of Five Specifications using Panel Data

G2010/03 C. KLEIN - O. SIMON
Le modèle MÉSANGE réestimé en base 2000 Tome 1 - Version avec volumes à prix constants

G2010/04 M.-É. CLERC - É. COUDIN
L'IPC, miroir de l'évolution du coût de la vie en France ? Ce qu'apporte l'analyse des courbes d'Engel

G2010/05 N. CECI-RENAUD - P.-A. CHEVALIER
Les seuils de 10, 20 et 50 salariés : impact sur la taille des entreprises françaises

G2010/06 R. AEBERHARDT - J. POUGET
National Origin Differences in Wages and Hierarchical Positions - Evidence on French Full-Time Male Workers from a matched Employer-Employee Dataset

G2010/07 S. BLASCO - P. GIVORD
Les trajectoires professionnelles en début de vie active : quel impact des contrats temporaires ?

G2010/08 P. GIVORD
Méthodes économétriques pour l'évaluation de politiques publiques

G2010/09 P.-Y. CABANNES - V. LAPÈGUE - E. POULIQUEN - M. BEFFY - M. GAINI
Quelle croissance de moyen terme après la crise ?

G2010/10 I. BUONO - G. LALANNE
La réaction des entreprises françaises à la baisse des tarifs douaniers étrangers
G2010/11 R. RATHELOT - P. SILLARD
L'apport des méthodes à noyaux pour mesurer la concentration géographique - Application à la concentration des immigrés en France de 1968 à 1999

G2010/12 M. BARATON - M. BEFFY - D. FOUGÈRE
Une évaluation de l'effet de la réforme de 2003 sur les départs en retraite - Le cas des enseignants du second degré public

G2010/13 D. BLANCHET - S. BUFFETEAU - E. CRENNER
S. LE MINEZ
Le modèle de microsimulation Destinie 2 : principales caractéristiques et premiers résultats

G2010/14 D. BLANCHET - E. CRENNER
Le bloc retraites du modèle Destinie 2 : guide de l'utilisateur

G2010/15 M. BARLET - L. CRUSSON - S. DUPUCH - F. PUECH
Des services échangés aux services échangeables : une application sur données françaises

G2010/16 M. BEFFY - T. KAMIONKA
Public-private wage gaps: is civil-servant human capital sector-specific?

G2010/17 P.-Y. CABANNES - H. ERKEL-ROUSSE - G. LALANNE - O. MONSO - E. POULIQUEN
Le modèle Mésange réestimé en base 2000 Tome 2 - Version avec volumes à prix chaînés

G2010/18 R. AEBERHARDT - L. DAVEZIES
Conditional Logit with one Binary Covariate: Link between the Static and Dynamic Cases

G2011/01 T. LE BARBANCHON - B. OURLIAC - O. SIMON
Les marchés du travail français et américain face aux chocs conjonctuels des années 1986 à 2007 : une modélisation DSGE

G2011/02 C. MARBOT
Une évaluation de la réduction d'impôt pour l'emploi de salariés à domicile

G2011/03 L. DAVEZIES
Modèles à effets fixes, à effets aléatoires, modèles mixtes ou multi-niveaux : propriétés et mises en œuvre des modélisations de l'hétérogénéité dans le cas de données groupées

G2011/04 M. ROGER - M. WASMER
Heterogeneity matters: labour productivity differentiated by age and skills

G2011/05 J.-C. BRICONGNE - J.-M. FOURNIER
V. LAPÈGUE - O. MONSO
De la crise financière à la crise économique L'impact des perturbations financières de 2007 et 2008 sur la croissance de sept pays industrialisés

G2011/06 P. CHARNOZ - É. COUDIN - M. GAINI
Wage inequalities in France 1976-2004: a quantile regression analysis

G2011/07 M. CLERC - M. GAINI - D. BLANCHET
Recommendations of the Stiglitz-Sen-Fitoussi Report: A few illustrations

G2011/08 M. BACHELET - M. BEFFY - D. BLANCHET
Projeter l'impact des réformes des retraites sur l'activité des 55 ans et plus : une comparaison de trois modèles

G2011/09 C. LOUVOT-RUNAVOT
L'évaluation de l'activité dissimulée des entre-

prises sur la base des contrôles fiscaux et son insertion dans les comptes nationaux

G2011/10 A. SCHREIBER - A. VICARD
La tertiairisation de l'économie française et le ralentissement de la productivité entre 1978 et 2008

G2011/11 M.-É. CLERC - O. MONSO - E. POULIQUEN
Les inégalités entre générations depuis le baby-boom

G2011/12 C. MARBOT - D. ROY
Évaluation de la transformation de la réduction d'impôt en crédit d'impôt pour l'emploi de salariés à domicile en 2007

G2011/13 P. GIVORD - R. RATHELOT - P. SILLARD
Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program

G2011/14 X. D'HAULTFOEUILLE - P. GIVORD - X. BOUTIN
The Environmental Effect of Green Taxation: the Case of the French "Bonus/Malus"

G2011/15 M. BARLET - M. CLERC - M. GARNEO - V. LAPÈGUE - V. MARCUS

La nouvelle version du modèle MZE, modèle macroéconométrique pour la zone euro

G2011/16 R. AEBERHARDT - I. BUONO - H. FADINGER
Learning, Incomplete Contracts and Export Dynamics: theory and Evidence form French Firms

G2011/17 C. KERDRAIN - V. LAPÈGUE
Restrictive Fiscal Policies in Europe: What are the Likely Effects?

G2012/01 P. GIVORD - S. QUANTIN - C. TREVIEN
A Long-Term Evaluation of the First Generation of the French Urban Enterprise Zones

G2012/02 N. CECI-RENAUD - V. COTTET
Politique salariale et performance des entreprises

G2012/03 P. FÉVRIER - L. WILNER
Do Consumers Correctly Expect Price Reductions? Testing Dynamic Behavior

G2012/04 M. GAINI - A. LEDUC - A. VICARD
School as a shelter? School leaving-age and the business cycle in France

G2012/05 M. GAINI - A. LEDUC - A. VICARD
A scarred generation? French evidence on young people entering into a tough labour market

G2012/06 P. AUBERT - M. BACHELET
Disparités de montant de pension et redistribution dans le système de retraite français

G2012/07 R. AEBERHARDT - P GIVORD - C. MARBOT
Spillover Effect of the Minimum Wage in France: An Unconditional Quantile Regression Approach

G2012/08 A. EIDELMAN - F. LANGUMIER - A. VICARD
Prélèvements obligatoires reposant sur les ménages : des canaux redistributifs différents en 1990 et 2010

G2012/09 O. BARGAIN - A. VICARD
Le RMI et son successeur le RSA découragent-ils certains jeunes de travailler ? Une analyse sur les jeunes autour de 25 ans

G2012/10 C. MARBOT - D. ROY
Projections du coût de l'APA et des caractéristiques de ses bénéficiaires à l'horizon 2040 à l'aide du modèle Destinie

G2012/11 A. MAUROUX
Le crédit d'impôt dédié au développement durable : une évaluation économique

G2012/12 V. COTTET - S. QUANTIN - V. RÉGNIER
Coût du travail et allègements de charges : une estimation au niveau établissement de 1996 à 2008

G2012/13 X. D'HAULTFOEUILLE - P. FÉVRIER - L. WILNER
Demand Estimation in the Presence of Revenue Management

G2012/14 D. BLANCHET - S. LE MINEZ
Joint macro/micro evaluations of accrued-to-date pension liabilities: an application to French reforms

G2013/01 T. DEROYON - A. MONTAUT - P-A PIONNIER
Utilisation rétrospective de l'enquête Emploi à une fréquence mensuelle : apport d'une modélisation espace-état

G2013/02 C. TREVIEN
Habiter en HLM: quel avantage monétaire et quel impact sur les conditions de logement ?

G2013/03 A. POISSONNIER
Temporal disaggregation of stock variables - The Chow-Lin method extended to dynamic models

G2013/04 P. GIVORD - C. MARBOT
Does the cost of child care affect female labor market participation? An evaluation of a French reform of childcare subsidies

G2013/05 G. LAME - M. LEQUIEN - P.-A. PIONNIER
Interpretation and limits of sustainability tests in public finance

G2013/06 C. BELLEGO - V. DORTET-BERNADET
La participation aux pôles de compétitivité : quelle incidence sur les dépenses de R&D et l'activité des PME et ETI ?

G2013/07 P.-Y. CABANNES - A. MONTAUT - P.-A. PIONNIER
Évaluer la productivité globale des facteurs en France : l'apport d'une mesure de la qualité du capital et du travail

G2013/08 R. AEBERHARDT - C. MARBOT
Evolution of Instability on the French Labour Market During the Last Thirty Years

G2013/09 J-B. BERNARD - G. CLÉAUD
Oil price: the nature of the shocks and the impact on the French economy

G2013/10 G. LAME
Was there a « Greenspan Conundrum » in the Euro area?

G2013/11 P. CHONÉ - F. EVAIN - L. WILNER - E. YILMAZ
Introducing activity-based payment in the hospital industry : Evidence from French data

G2013/12 C. GRISLAIN-LETRÉMY
Natural Disasters: Exposure and Underinsurance

G2013/13 P.-Y. CABANNES - V. COTTET - Y. DUBOIS - C. LELARGE - M. SICSIC
French Firms in the Face of the 2008/2009 Crisis

G2013/14 A. POISSONNIER - D. ROY
Households Satellite Account for France in 2010. Methodological issues on the assessment of domestic production

G2013/15 G. CLÉAUD - M. LEMOINE - P.-A. PIONNIER
Which size and evolution of the government expenditure multiplier in France (1980-2010)?

G2014/01 M. BACHELET - A. LEDUC - A. MARINO
Les biographies du modèle Destinie II : rebasage et projection

G2014/02 B. GARBINTI
L'achat de la résidence principale et la création d'entreprises sont-ils favorisés par les donations et héritages ?

G2014/03 N. CECI-RENAUD - P. CHARNOZ - M. GAINI
Évolution de la volatilité des revenus salariaux du secteur privé en France depuis 1968

G2014/04 P. AUBERT
Modalités d'application des réformes des retraites et prévisibilité du montant de pension

G2014/05 C. GRISLAIN-LETRÉMY - A. KATOSSKY
The Impact of Hazardous Industrial Facilities on Housing Prices: A Comparison of Parametric and Semiparametric Hedonic Price Models

G2014/06 J.-M. DAUSSIN-BENICHOU - A. MAUROUX
Turning the heat up. How sensitive are households to fiscal incentives on energy efficiency investments?

G2014/07 C. LABONNE - G. LAMÉ
Credit Growth and Capital Requirements: Binding or Not?

G2014/08 C. GRISLAIN-LETRÉMY et C. TREVIEN
The Impact of Housing Subsidies on the Rental Sector: the French Example

G2014/09 M. LEQUIEN et A. MONTAUT
Croissance potentielle in France et en zone euro : un tour d'horizon des méthodes d'estimation

G2014/10 B. GARBINTI - P. LAMARCHE
Les hauts revenus épargnent-ils davantage ?

G2014/11 D. AUDENAERT - J. BARDAJI - R. LARDEUX - M. ORAND - M. SICSIC
Wage Resilience in France since the Great Recession

G2014/12 F. ARNAUD - J. BOUSSARD - A. POISSONNIER - H. SOUAL
Computing additive contributions to growth and other issues for chain-linked quarterly aggregates

G2014/13 H. FRAISSE - F. KRAMARZ - C. PROST
Labor Disputes and Job Flows