Économie et Statistique n° 437 Employees over 50 and Information Technology - Impact of Thresholds of 10, 20, and 50 Employees on the Size of French Firms - Impact of Survey Method on Measurement of Mobility Behaviour
Impact of Thresholds of 10, 20, and 50 Employees on the Size of French Firms
International comparisons of business demographics show France as characterized by a high proportion of very small enterprises and a more modest proportion of medium-sized enterprises (OECD, 2009). The accumulation of additional regulations related to the crossing of certain size thresholds is sometimes mentioned as a significant obstacle to the growth of small businesses, which could explain this distinctive French profile. Indeed, the Economic Modernization Act of 4 August 2008 contains provisions for “dampening threshold effects”. We study the distribution and dynamics of firms around the thresholds of 10, 20, and 50 employees by comparing the various data sources available and alternative concepts of workforce size. Discontinuities in the distribution and dynamics of firms around the thresholds appear very strong using tax data but weak or non-existent using employers' annual declarations of payroll data (DADS forms) and data from the agencies in charge of collecting social-insurance contributions (URSSAF). Applying a statistical model to tax data, we estimate the joint effect of thresholds on the long-term dynamics and distribution of firms. The effect is statistically significant but modest, even when using the source that indicates the strongest effects. According to this source, the proportion of firms with 0-9 employees declines by 0.4 points absent administrative discontinuities, whereas the proportion of firms with 10-19 employees and that of firms with 20-250 employees rises 0.2 points.