Labour market reforms and the Great stagnation g Phili Philippe - PowerPoint PPT Presentation

CC By Labour market reforms and the Great stagnation g Phili Philippe Askenazy (CNRS-CMH-ENS-PSL) A k (CNRS CMH ENS PSL) « Chaire travail » Workshop, June 2019

Italy and France: too different? Fig. 1: Huge educational gap. Working age population 25-64 by ISCED l levels in 2015 and 2018. Millions (source: EU-LFS) l i 2015 d 2018 Milli ( EU LFS)

A different society Fig. 2: Persistent gap in women participation. Rate in % for women aged 25 64 in 2015 and 2018 (source: EU LFS) Rate in % for women aged 25-64 in 2015 and 2018 (source: EU-LFS)

Dolce vita versus tripalium ? Fig. 3a: Presenteeism at work. Fig. 3b: Commuting time. “How “Over the past 12 months did you “O th t 12 th did many minutes per day do you i t d d work when you were sick?”. % of usually spend travelling to and Yes (Source: 2015 European Working ( p g from work?”. % by duration y Conditions Survey) (Source: 2015 EWCS)

The Italian productivity disease Fig. 4: GDP per hour worked in 2010 PPP$, 1995-2017 (source: OECD) +7% +18% +6% France seems a new victim (and many other OECD countries)

Productive innovation model à la Aghion et al. with bargaining power (WIP) • Key parameter: the firm market power is replaced by its • Key parameter: the firm market power is replaced by its relative bargaining power β • β = (monopsony, labour supply, labour rules etc.) • Low β = workers capture the productivity gains => low margins => poor investment, no incentive to gain in productivity • High β = low labour costs => “easy game” • High β = low labour costs => easy game • Moderate β = permanent wages pressures=> improving productivity for maintaining profitability => U-inverted curve in β

Productivity Hard game Easy game β

Productivity Italy Low educated Article 18 Dependant self-employed Branch (Parasubordinato…) agreements agreements β β

Productivity Italy Fornero +Renzi’s Jobs act ? Low educated Article 18 Dependant self-employed Branch (Parasubordinato…) agreements agreements β β

Productivity France 7 million very-short term contracts in 2000 11 million in 2008 A t Auto-entrepreneurs t status t t in 2009 18 million very short in 2018 1 2 1.2 million micro-entreprises illi i t i β β

Productivity El Khomri + Macron’s loi Travail ? ’ l i il 18 million very short in 2018 1.2 million micro-entreprises 1.2 million micro entreprises β β