The Economics Department at Princeton is pleased to share that Pauline Carry, formerly a Postdoctoral Research Associate with the department, joined the faculty as an Assistant Professor of Economics and International Affairs. She is also a member of the Industrial Relations Section.
Carry’s research focuses on labor economics and macroeconomics, with a special interest in how employment contracts are determined and the role of labor market institutions. She earned her Ph.D. in Economics from Institut Polytechnique de Paris in 2023 and her dissertation covered the micro and macro effects of labor market regulations.
In a recent paper, “The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market,” Carry examines the effects of working time regulations on the allocation of workers and hours. Utilizing a unique reform introducing a minimum workweek of 24 hours in France in 2014, affecting 15% of jobs and drawing on administrative data and an event study design, she finds “a firm-level reduction in total hours worked, showing imperfect substitutability between workers and hours.” Overall, “the minimum workweek increased total hours worked by 1% due to positive general equilibrium effects, but concentrated hours among fewer workers as unemployment rose by 2%. Gender inequality increased because of the within-firm effects and less reallocation of women between firms.”
Carry’s latest work is focused on understanding how those underlying parameters of the employment contract are determined. For example, determining if the number of hours worked weekly is chosen by the employer or is bargained with the worker. She recognizes that “developing our knowledge of how employers and workers behave and interact on the labor market is crucial to understand the determination of hours, wages, employment flows, etc. It is also important to understand how labor market policies might impact the economy.”
“Conflict in Dismissals,” a working paper in NBER WP, delves into this focus as Carry and her co-author Benjamin Schoefer investigate how employers and employees interact during a job separation. Using the French labor market, where personal dismissals are very costly for firms because of employment protection regulations, they exploit the possibility to replace a dismissal by a cheaper separation mode: a separation by mutual agreement (SMA). Carry said, “We find that most dismissals are characterized by conflict, rather than cooperation. This conflict is driven by hostility between workers and employers, dismissals being used as a discipline device by employers, and asymmetric beliefs about potential labor court outcomes after a dismissal.” They find that removing these three drivers of conflict would increase SMA adoption from 12% to 67% of dismissals.
When asked about what she is looking forward to as she transitions to a faculty member at Princeton, Carry said, “Princeton is such a special place for economics, I am very excited to be a part of this group. I look forward to learning from colleagues and students!”
“We are thrilled to welcome Pauline Carry to the economics department and a faculty associate of the Industrial Relations Section,” said David Lee, Acting Director of the Industrial Relations Section. “Pauline works in the intersection of labor economics and macroeconomics, studying the nature and impact of employment contracts and how they affect inequality and the broader economy. Her work has been recognized with distinction by the European Association of Labour Economists, the prestigious Review of Economic Studies Tour, and won the W.E. Upjohn Institute dissertation award.”