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Profit sharing and corporate performance

Our goal is to study the effect of mandatory profit sharing on various dimensions of firm behavior, in particular the labor share in value added. Our empirical strategy will rest on studying firms around the size threshold above which profit sharing is mandatory. This thredhold was at 100 employees in the 1980s, and was decreased to 50 employees in 1990. Our approach will combine regression discontinuity (firms should bunch at the threshorld more if they are more averse to increasing the labor share), and more classic difference-in-difference strategies (firms between 50 and 100 employees being the treated group, and firms above 100 or below 50 being the control group). The richness of French administrative data will allow us to study firms’ responses to the mandatory profit scheme in many different directions : Labor share, investment and labor-capital substitution, happiness at work, the incidence on wage etc.