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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
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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

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    1. repec:spo:wpecon:info:hdl:2441/10av5r3jd18pmoqdkopa5b5vgl is not listed on IDEAS
    2. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
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    4. Gilbert Cette & Etienne Wasmer, 2012. "Les enjeux des changements de règles de revalorisation automatique du SMIC," Sciences Po Economics Publications (main) hal-01070395, HAL.
    5. Pierre Cahuc & Cette Gilbert & André Zylberberg, 2008. "Salaire minimum et bas revenus," Post-Print halshs-00638149, HAL.
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    8. Gilbert Cette & Étienne Wasmer, 2010. "La revalorisation automatique du SMIC," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 139-159.
    9. 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.
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    Citations

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    Cited by:

    1. Verdugo, Gregory, 2014. "The great compression of the French wage structure, 1969–2008," Labour Economics, Elsevier, vol. 28(C), pages 131-144.
    2. 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.
    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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    Keywords

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    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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