Restaurant Prices and the Minimum Wage

54 Pages Posted: 20 Aug 2008

See all articles by Denis Fougère

Denis Fougère

National Center for Scientific Research (CNRS); CNRS and SCIENCES PO PARIS; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Erwan Gautier

Banque de France - Centre de Recherche

Hervé le Bihan

Banque de France - Centre de Recherche

Multiple version iconThere are 3 versions of this paper

Date Written: June 2008

Abstract

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.

Keywords: Inflation, Minimum wage, Price stickiness, Restaurant prices

JEL Classification: D43, E31, L11

Suggested Citation

Fougere, Denis and Fougere, Denis and Gautier, Erwan and Le Bihan, Herve, Restaurant Prices and the Minimum Wage (June 2008). CEPR Discussion Paper No. DP6892, Available at SSRN: https://ssrn.com/abstract=1240202

Denis Fougere (Contact Author)

National Center for Scientific Research (CNRS)

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Erwan Gautier

Banque de France - Centre de Recherche ( email )

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Herve Le Bihan

Banque de France - Centre de Recherche ( email )

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75049 Paris Cedex 01
France

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