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Wage Rigidity, Collective Bargaining, and the Minimum Wage: Evidence from French Agreement Data

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Author Info

  • Sanvi Avouyi-Dovi

    (Banque de France and Leda-SDFi, Université de Paris-Dauphine)

  • Denis Fougère

    (CREST, CNRS, LIEPP/Sciences Po, CEPR, IZA, and Banque de France)

  • Erwan Gautier

    (Université de Nantes, LEMNA, and Banque de France)

Abstract

Using data sets on wage agreements at both industry and firm levels in France, we document stylized facts on wage stickiness. The average duration of wages is a little less than one year, and 10% of wages are modified each month by a wage agreement. The frequency of wage change agreements is staggered over the year, but the frequency of effective wage changes is seasonal. The national minimum wage has a significant impact on the probability and the seasonality of wage changes. Negotiated wage increases are correlated with inflation, minimum wage increases, and firm profitability. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00329
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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 95 (2013)
Issue (Month): 4 (October)
Pages: 1337-1351

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Handle: RePEc:tpr:restat:v:95:y:2013:i:4:p:1337-1351

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Keywords: wage stickiness; wage bargaining; minimum wage; downward nominal wage rigidity;

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References

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Cited by:
  1. Huw Dixon & Hervé Le Bihan, 2012. "Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro‐evidence with Macro Implications," Economic Journal, Royal Economic Society, vol. 122(560), pages 532-554, 05.
  2. Juillard, Michel & Le Bihan, Herve & Millard, Stephen, 2013. "Non-uniform wage-staggering: European evidence and monetary policy implications," Bank of England working papers 477, Bank of England.
  3. Etienne Lehmann & François Marical & Laurence Rioux, 2012. "Labor Income Responds Differently to Income-Tax and Payroll-Tax Reforms," CESifo Working Paper Series 3974, CESifo Group Munich.
  4. Horny, G. & Sevestre, P., 2010. "Wage and price joint dynamics at the firm level: an empirical analysis," Working papers 305, Banque de France.
  5. Alena Bicakova, 2014. "The Trade-off Between Unemployment and Wage Inequality Revisited," CERGE-EI Working Papers wp502, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  6. Heckel, T. & Le Bihan, H. & Montornès, J., 2008. "Sticky Wages. Evidence from Quarterly Microeconomic Data," Working papers 208, Banque de France.
  7. Montornès, J. & Sauner-Leroy, J-B., 2010. "Wage-setting Behavior in France: Additional Evidence from an Ad-hoc Survey," Working papers 282, Banque de France.

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