Max Brès

Working papers

Aging Consumers, Competition and Growth 

(New version coming soon)

with Daniele Angelini

As people age, their preferences become less elastic and the opportunity cost of time drops after retirement, influencing purchasing behaviour. Hence, demographic changes affect competition by altering the age composition of consumers, carrying substantial macroeconomic implications. We identify this demand-side channel of demographic changes using unexpected shifts in the age composition of foreign consumers. We find that middle-aged consumers reduce competition with respect to younger and older consumers, resulting in lower production and higher prices. In a multi-sector general equilibrium search model we show that young consumers enhance between-varieties competition and old consumers enhance within-varieties competition. Conversely, middle-aged consumers reduce competition on both margins, shifting demand to less productive firms, thus raising average prices and slowing economic growth. In the United States, changes in the age composition of consumers led to an 8.7% reduction GDP growth from 1995-2004 and a 10.3% increase from 2005-2019 as baby-boomers aged.

Future versus Today's Improvements: The Trade-off of Place-Based Policies 

(New version coming soon)

with Philipp Kircher and David Koll

This paper provides causal evidence on the labor-market effects of reallocating firm subsidies across sectors within local economies. We exploit a change in the geographical coverage of France’s Aides à Finalité Régionale (AFR) zoning that altered which commuting zones qualified for a more permissive subsidy regime. This eligibility change induced a reallocation of subsidies away from research-intensive and high-skilled service activities toward manufacturing and low-skilled services, while leaving the overall subsidy envelope received by each area essentially unchanged. We show that this sectoral reallocation leads to persistent increases in local employment and hours over the long run, without adverse effects on aggregate value added. The employment gains are driven by increased firm entry, particularly in manufacturing, rather than by reduced exit. At the worker level, average earnings decline in repeated cross-sections due to lower hours per worker, while workers already present in treated areas experience sustained earnings gains. Overall, our results highlight sectoral targeting rather than subsidy levels as a central mechanism through which place-based policies shape local labor-market outcomes.