• [BdF Working paper, 2025]  [Insee Working Paper, 2023]

Abstract: We use a newly constructed and quasi-exhaustive matched employer-employee database to study the contribution of firms to wage inequality in France. We implement a simple and tractable correction for the limited mobility bias. Our analysis, covering the period 2002-2019, reveals an increase in between-firm inequality, mainly due to the growing clustering of workers with similar market value. These phenomena are associated with increasing occupational specialization at the firm level. Our results highlight the importance of bias-corrected AKM estimates in capturing the dynamics of wage inequality, and show how both observable job types and unobservable individual characteristics contribute to these patterns.

Firms create temporary jobs for different reasons: to screen candidates for permanent positions; to cope with seasonal and short-term swings in activity; to increase flexibility in the use of the workforce. We use data on the universe of temporary jobs in Italy between 2013 and 2017 to identify and characterize the firms that engage in these different strategies. Screening is not a primary driver of temporary employment: the conversion rate of fixed-term employment relationships -- 20\% on average -- is strongly predicted by unobserved firms factors and strongly positively correlated with the stated duration of the first contract, a choice that the firm makes before observing the surplus of the match. Seasonality in activity involves a limited (below 20\%) but well-identifiable share of jobs and firms. On the other hand, the use of fixed-term contracts as a buffer to meet flexibility needs is more difficult to characterize: while some firms resort to temporary employment because their revenues are highly volatile, others simply discharge part of their normal business risk onto workers. This may lead to excessive worker turnover. These results have important policy implications for the design and regulation of fixed-term employment contracts.

• Access to Italian Social Security data through VisitINPS Scholars Program

We examine the impact of Italy's 2018 reform tightening legislation on temporary contracts. Analyzing employment and wage dynamics, we find moderate disemployment effects and a significant shift in workforce composition. Exposed firms experienced a substantial reduction in the share of days worked in fixed-term contracts, offset by an increase in permanent employment, primarily through the conversion of existing temporary contracts. Notably, we document a sizeable decline in the starting wages for workers transitioning from fixed-term to permanent contracts compared to pre-reform levels. Our results suggest the existence of some degree of market power on the part of firms, with increased security for the workers being partly compensated by lower wages.

We use matched employer-employee datasets for the United States and 10 European countries to analyze the role of firms in the gender wage gap. Five important facts stand out: (1) Firms play a key role in shaping gender wage gaps in all countries as well as differences between them. Gender gaps in firm wage premiums account for 50% of the overall gap in the United States and 10-30% in European countries. (2) There are important differences across countries in the relative importance of gaps in wage premiums within firms, due to gender differences in pay-setting, and between firms, due to the sorting of women in low-wage firms. (3) Cross-country differences in pay-setting are partly explained by the fact that women capture a smaller share of firm-wide productivity gains. They receive up to 15% less of surplus-driven rents than men.  (4) Cross-country differences in sorting reflect the degree of wage premium dispersion between firms and gender segregation across firms paying different wages. Sorting is primarily driven by segregation.  (5) Women are disproportionately employed in firms with a high prevalence of part-time work. These firms offer lower wage premiums, contributing to the gender wage gap.