Hello. I'm Fabien Petit.

Abstract: Values characterize preferences that themselves shape individuals’ decisions explaining future gaps in economic outcomes. I study the dynamics of values when values are inter-dependent and shocked by life events and I show that spillover effects across values do exist. Individuals choose to identify with a group with which they share values, but there are psychological costs to have values that are not consistent with those of the group. Whenever an event occurs in someone’s life—bringing new information—this may change some of her values. This shock can drive the individual to identify with a new group if the shocked values have taken her too far from her previous group. By identifying with the new group, she changes all her values—including not initially affected values—toward those of that new group. By changing values that are not affected by the shock, life events generate spillover effects across values.

Abstract: The coincidence in timing between the start of the decline of the labor share and the entry of the baby-boomers cohort into adulthood—entering the labor market and reaching voting age—has received no attention. I argue that the observed shift away from labor toward capital is a response to changes in labor market institutions endogenously determined by the age structure of the population through voting. The size of the boomer cohort gives them large political weight and allows them to change public policy in their favor when they are young and then old. These institutional changes have consequences for the wage bargaining to which firms respond by substituting labor with capital to thwart workers’ appropriation of the rents. I develop a model which links public policy to wage bargaining and calibrate it for France and the US. Numerical simulations can replicate the decline of the labor share and labor market dynamics.

Abstract: The increase in employment polarization observed in several high-income economies has coincided with a reduction in inter-generational mobility. This paper argues that the disappearance of middling jobs can drive changes in mobility, notably by removing a stepping-stone towards high-paying occupations for those from less well-off family backgrounds. Using data for two British cohorts we examine how the occupational outcomes of children depend on both initial occupations and occupational upgrading during their careers. We find that transitions across occupations are key for mobility and that the effect of parental income on those transitions has become stronger over time. Moreover, the impact of parental income increased the most in the regions where the share of middling employment fell the most, suggesting that greater employment polarization may be one of the factors behind the observed decline in mobility.