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Minimum Wage and the Average Wage in France: A Circular Relationship?

  • Cette, Gilbert

    ()

    (Bank of France)

  • Chouard, Valérie

    ()

    (Bank of France)

  • Verdugo, Gregory

    ()

    (Bank of France)

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.

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File URL: http://ftp.iza.org/dp7502.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7502.

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Length: 10 pages
Date of creation: Jul 2013
Date of revision:
Publication status: published in: Economics Bulletin, 2013, 33 (3), 1832-1839
Handle: RePEc:iza:izadps:dp7502
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  1. Gilbert Cette & Etienne Wasmer, 2012. "Les enjeux des changements de règles de revalorisation automatique du SMIC," Sciences Po publications 5, Sciences Po.
  2. Cette, Gilbert & Etienne, Wasmer, 2009. "La revalorisation automatique du SMIC
    [Automatic indexation rules of the French minimum wage (SMIC)]
    ," MPRA Paper 18855, University Library of Munich, Germany.
  3. Patrick Sevestre & Pierre Blanchard, 1989. "L'indexation des salaires : quelle rupture en 1982 ?," Économie et Prévision, Programme National Persée, vol. 87(1), pages 67-74.
  4. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
  5. 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.
  6. Pierre Cahuc & Cette Gilbert & André Zylberberg, 2008. "Salaire minimum et bas revenus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00638149, HAL.
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