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The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France

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Listed:
  • Denis Fougère

    (LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po, CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research)

  • Erwan Gautier

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, Banque de France - Banque de France - Banque de France)

  • Sébastien Roux

    (INED - Institut national d'études démographiques, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, Banque de France - Banque de France - Banque de France)

Abstract

This paper examines empirically how industry-level wage floors are set in French industry-level wage agreements and how the national minimum wage (NMW) interacts with industry-level wage bargaining. For this, we use a unique dataset containing about 48,000 occupation-specific wage floors, in more than 340 French industries over the period 2006-2014. We find that the NMW has a significant impact on the seasonality and on the timing of the wage bargaining process. Inflation, past sectoral wage increases and real NMW increases are the main drivers of wage floor adjustments; elasticities of wage floors with respect to these macro variables are 0.6, 0.3 and 0.25 respectively. Wage floor elasticities to inflation and to the NMW both decrease along the wage floor distribution but are still positive for all levels of wage floors.

Suggested Citation

  • Denis Fougère & Erwan Gautier & Sébastien Roux, 2016. "The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France," SciencePo Working papers Main hal-01308722, HAL.
    • Handle: RePEc:hal:spmain:hal-01308722
    Note: View the original document on HAL open archive server: https://hal.science/hal-01308722v2
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    3. Pierre Cahuc & Olivier Charlot & Franck Malherbet & Helène Benghalem & Emeline Limon, 2020. "Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?," The Economic Journal, Royal Economic Society, vol. 130(626), pages 422-445.
    4. Clémence Berson & Édouard Jousselin, 2018. "Wage bargaining in Europe: a wide range of increasingly decentralised models since the crisis," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 217, pages 1-9, Spring.
    5. Solórzano Diego & Dixon Huw, 2020. "The Relationship Between Nominal Wage and Price Flexibility: New Evidence," Working Papers 2020-20, Banco de México.
    6. Juan Carluccio & Denis Fougère & Erwan Gautier, 2016. "The Impact of trade shocks on collective wage bargaining agreements," SciencePo Working papers Main hal-03459333, HAL.
    7. Sergei Guriev & Biagio Speciale & Michele Tuccio, 2019. "How do Regulated and Unregulated Labor Markets Respond to Shocks? Evidence from Immigrants During the Great Recession," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 35(1), pages 37-76.
    8. Alexander Hijzen & Pedro S. Martins & Jante Parlevliet, 2017. "Collective Bargaining Through the Magnifying Glass: A Comparison Between the Netherlands and Portugal," IMF Working Papers 2017/275, International Monetary Fund.
    9. Elena Bobeica & Matteo Ciccarelli & Isabel Vansteenkiste, 2020. "The Link between Labor Cost Inflation and Price Inflation in the Euro Area," Central Banking, Analysis, and Economic Policies Book Series, in: Gonzalo Castex & Jordi Galí & Diego Saravia (ed.),Changing Inflation Dynamics,Evolving Monetary Policy, edition 1, volume 27, chapter 4, pages 071-148, Central Bank of Chile.
    10. Alexander Hijzen & Pedro S. Martins & Jante Parlevliet, 2017. "Collective Bargaining Through the Magnifying Glass: A Comparison Between the Netherlands and Portugal," IMF Working Papers 2017/275, International Monetary Fund.

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    More about this item

    Keywords

    minimum wage; collective bargaining; wages;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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