Firm Size Distortions and the Productivity Distribution: Evidence from France

@article{Garicano2013FirmSD,
  title={Firm Size Distortions and the Productivity Distribution: Evidence from France},
  author={Luis Garicano and Claire Lelarge and John Van Reenen},
  journal={European Economics: Labor \& Social Conditions eJournal},
  year={2013}
}
We show how size-contingent laws can be used to identify the equilibrium and welfare effects of labor regulation. Our framework incorporates such regulations into the Lucas (1978) model and applies this to France where many labor laws start to bind on firms with exactly 50 or more employees. Using data on the population of firms between 2002 and 2007 period, we structurally estimate the key parameters of our model to construct counterfactual size, productivity and welfare distributions. With… 
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