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Minimum wage and the average wage in France: a circular relationship?

Author

Listed:
  • Gilbert Cette

    (Banque de France and Université de la Méditerranée (DEFI))

  • Valérie Chouard

    (Banque de France)

  • Gregory Verdugo

    (Banque de France)

Abstract

This paper investigates whether increases in the minimum wage in France have the same impact on the average wage when intended to preserve the purchasing power of the minimum wage as when intended to raise it. We find that the impact of the minimum wage on the average wage is strong, but differs depending on the indexation factor. We also find some empirical evidence of circularity between the average wage and the minimum wage.

Suggested Citation

  • Gilbert Cette & Valérie Chouard & Gregory Verdugo, 2013. "Minimum wage and the average wage in France: a circular relationship?," Economics Bulletin, AccessEcon, vol. 33(3), pages 1832-1839.
    • Handle: RePEc:ebl:ecbull:eb-13-00422
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I3-P171.pdf
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    References listed on IDEAS

    as
    1. Gilbert Cette & Etienne Wasmer, 2012. "Les enjeux des changements de règles de revalorisation automatique du SMIC," Working Papers hal-01070395, HAL.
    2. repec:hal:wpspec:info:hdl:2441/10av5r3jd18pmoqdkopa5b5vgl is not listed on IDEAS
    3. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
    4. Pierre Blanchard & Patrick Sevestre, 1989. "L'indexation des salaires : quelle rupture en 1982 ?," Économie et Prévision, Programme National Persée, vol. 87(1), pages 67-74.
    5. Gilbert Cette & Étienne Wasmer, 2010. "La revalorisation automatique du SMIC," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 139-159.
    6. Pierre Cahuc & Cette Gilbert & André Zylberberg, 2008. "Salaire minimum et bas revenus," Post-Print halshs-00638149, HAL.
    7. Gregory Verdugo & Henri Fraisse & Guillaume Horny, 2012. "Évolution des inégalités salariales en France. Le rôle des effets de composition," Revue économique, Presses de Sciences-Po, vol. 63(6), pages 1081-1112.
    8. repec:hal:spmain:info:hdl:2441/10av5r3jd18pmoqdkopa5b5vgl is not listed on IDEAS
    9. repec:hal:journl:hal-01070395 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ortega, Javier & Verdugo, Gregory, 2014. "The impact of immigration on the French labor market: Why so different?," Labour Economics, Elsevier, vol. 29(C), pages 14-27.
    2. Verdugo, Gregory, 2014. "The great compression of the French wage structure, 1969–2008," Labour Economics, Elsevier, vol. 28(C), pages 131-144.
    3. Arni, Patrick & Eichhorst, Werner & Pestel, Nico & Spermann, Alexander & Zimmermann, Klaus F., 2014. "Kein Mindestlohn ohne unabhängige wissenschaftliche Evaluation," IZA Standpunkte 65, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Minimum Wage; Average Wage; France;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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