Wage Rigidity, Collective Bargaining and the Minimum Wage: Evidence from French Agreement Data

51 Pages Posted: 26 Jul 2010

See all articles by Sanvi Avouyi-Dovi

Sanvi Avouyi-Dovi

Banque de France; ICN Business School

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

Multiple version iconThere are 3 versions of this paper

Date Written: July 2010

Abstract

Using several unique data sets on wage agreements at both the firm- and the industry-levels in France, we examine the impact of typical European wage-setting institutions on the form and the degree of wage rigidity. We highlight different stylized facts concerning wage stickiness. First, in France, the typical duration of a wage agreement is one year. Consequently, a Taylor (1980) -type model appears to reproduce appropriately the distribution of agreement durations. Some 30 percent of settlements stipulate several predetermined wage changes during the year following the date of signature of the agreement. The frequency of wage agreements is highly seasonal, but the dates at which agreements take effect are more staggered. The date at which the national minimum wage level is revised each year has a significant impact on the timetable of wage agreements, both at the firm- and at the industry-levels. Wage increases negotiated at these two levels mainly depend on the inflation regime, the firm profitability and the proportion of minimum-wage workers in the same industry.

Keywords: downward nominal wage rigidity, minimum wage, wage bargaining, wage stickiness

JEL Classification: E30, J31, J50

Suggested Citation

Avouyi-Dovi, Sanvi and Fougere, Denis and Fougere, Denis and Gautier, Erwan, Wage Rigidity, Collective Bargaining and the Minimum Wage: Evidence from French Agreement Data (July 2010). CEPR Discussion Paper No. DP7932, Available at SSRN: https://ssrn.com/abstract=1647507

Sanvi Avouyi-Dovi (Contact Author)

Banque de France ( email )

Paris
France

ICN Business School ( email )

13 rue du Marechal Ney
Nancy, 54000
France

Denis Fougere

National Center for Scientific Research (CNRS)

3, rue Michel-Ange
Paris cedex 16, 75794
France

CNRS and SCIENCES PO PARIS ( email )

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HOME PAGE: http://https://www.sciencespo.fr/osc/fr/node/1609.html

IZA Institute of Labor Economics

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Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Erwan Gautier

Banque de France - Centre de Recherche ( email )

31 rue Croix des Petits Champs
75049 Paris Cedex 01
France

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