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Restaurant Prices and the Minimum Wage

  • Fougère, D.
  • Gautier, E.
  • Le Bihan, H.

We examine the effect of the minimum wage on restaurant prices. For that purpose, we estimate a price rigidity model by exploiting a unique dataset of individual price quotes used to calculate the Consumer Price Index in France. We find a positive and significant impact of the minimum wage on prices. We obtain that the effect of the minimum wage on prices is very protracted. The aggregate impact estimated with our model takes more than a year to fully pass through to retail prices.

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Paper provided by Banque de France in its series Working papers with number 216.

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Length: 56 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:bfr:banfra:216
Contact details of provider: Postal: Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS
Web page: http://www.banque-france.fr/

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