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Inflation, Minimum Wage and Other Wages: An Econometric Study on French Macroeconomic Data

Author

Listed:
  • Yannick L’Horty

    (EPEE, University of Evry Val d’Essonne)

  • Christophe Rault

    (EPEE and EUREQua, Panthéon-Sorbonne University)

Abstract

This paper examines the set of interdependences between the formation of wages, prices and the minimum wage (SMIC) through a vectorial error correction model estimated on French quarterly macroeconomic data covering the 1970-1/1999-4 period. Two periods are distinguished: the period of inflation rise from 1970 to 1981, which coincides with an important squeeze of the wage range, measured by the ratio of the minimum wage to the hourly wage rate; the period of disinflation since 1981, that has been concomitant with a stability of wage inequalities. Disinflation has hardly benefited the evolution of the SMIC which has always profited by price rises, in real and relative terms, which have become less strong. This evolution doesn’t benefit any more of wage rises, when the interdependences between variables are taken into account. The SMIC seems however to have gained in efficiency as an instrument of wage disparity reduction. Its rises are finally more persistent in real terms and relatively to the other salaries and have always as little inflationary impact on wages as on prices.

Suggested Citation

  • Yannick L’Horty & Christophe Rault, 2003. "Inflation, Minimum Wage and Other Wages: An Econometric Study on French Macroeconomic Data," Documents de recherche 03-09, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  • Handle: RePEc:eve:wpaper:03-09
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    Cited by:

    1. Arouri, Mohamed & Teulon, Frédéric & Rault, Christophe, 2013. "Equity risk premium and regional integration," International Review of Financial Analysis, Elsevier, vol. 28(C), pages 79-85.
    2. Ekrame Boubtane & Dramane Coulibaly & Christophe Rault, 2013. "Immigration, Growth, and Unemployment: Panel VAR Evidence from OECD Countries," LABOUR, CEIS, vol. 27(4), pages 399-420, December.
    3. Denis Fougère & Erwan Gautier & Hervé Le Bihan, 2010. "Restaurant Prices and the Minimum Wage," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(7), pages 1199-1234, October.
    4. Nidhaleddine Ben Cheikh & Christophe Rault, 2016. "Recent estimates of exchange rate pass-through to import prices in the euro area," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 69-105, February.
    5. Arouri, Mohamed El Hedi & Caporale, Guglielmo Maria & Rault, Christophe & Sova, Robert & Sova, Anamaria, 2012. "Environmental Regulation and Competitiveness: Evidence from Romania," Ecological Economics, Elsevier, vol. 81(C), pages 130-139.
    6. Guglielmo Maria Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2009. "Financial Development and Economic Growth: Evidence from Ten New EU Members," Discussion Papers of DIW Berlin 940, DIW Berlin, German Institute for Economic Research.
    7. Shaikh Hamid & Tej Dhakar, 2008. "The behaviour of the US consumer price index 1913-2003: a study of seasonality in the monthly US CPI," Applied Economics, Taylor & Francis Journals, vol. 40(13), pages 1637-1650.
    8. Arouri, Mohamed El Hedi & Ben Youssef, Adel & M'henni, Hatem & Rault, Christophe, 2014. "Exploring the Causality Links between Energy and Employment in African Countries," IZA Discussion Papers 8296, Institute of Labor Economics (IZA).
    9. Ekrame Boubtane & Dramane Coulibaly & Christophe Rault, 2013. "Immigration, Growth, and Unemployment: Panel VAR Evidence from OECD Countries," LABOUR, CEIS, vol. 27(4), pages 399-420, December.
    10. Saten Kumar & Don J. Webber & Geoff Perry, 2009. "Real wages, inflation and labour productivity in Australia," Working Papers 0921, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    11. Arouri, Mohamed El Hedi & Ben Youssef, Adel & M'henni, Hatem & Rault, Christophe, 2012. "Energy consumption, economic growth and CO2 emissions in Middle East and North African countries," Energy Policy, Elsevier, vol. 45(C), pages 342-349.
    12. Ekrame Boubtane & Dramane Coulibaly & Christophe Rault, 2013. "Immigration, Growth, and Unemployment: Panel VAR Evidence from OECD Countries," LABOUR, CEIS, vol. 27(4), pages 399-420, December.
    13. Nidhaleddine Ben Cheikh & Christophe Rault, 2017. "Investigating first-stage exchange rate pass-through: Sectoral and macro evidence from euro area countries," The World Economy, Wiley Blackwell, vol. 40(12), pages 2611-2638, December.
    14. Saten Kumar & Don J. Webber & Geoff Perry, 2012. "Real wages, inflation and labour productivity in Australia," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2945-2954, August.
    15. Mohamed El Hedi Arouri & Adel Ben Youssef & Hatem M'Henni & Christophe Rault, 2014. "Energy use and economic growth in Africa: a panel Granger-causality investigation," Economics Bulletin, AccessEcon, vol. 34(2), pages 1247-1258.
    16. repec:ipg:wpaper:2014-481 is not listed on IDEAS
    17. repec:ipg:wpaper:2014-475 is not listed on IDEAS
    18. Sahbi Farhani & Sana Mrizak & Anissa Chaibi & Christophe Rault, 2014. "The Environmental Kuznets Curve and Sustainability: A Panel Data Analysis," CESifo Working Paper Series 4787, CESifo.

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    More about this item

    Keywords

    Formation des salaires; prix; salaire minimum; modèle à correction d’erreur; cointégration; analyse impulsionnelle;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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