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

52 Pages Posted: 6 Aug 2010

See all articles by Sanvi Avouyi-Dovi

Sanvi Avouyi-Dovi

Banque de France; ICN Business School

Denis Fougère

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); National Center for Scientific Research (CNRS); IZA Institute of Labor Economics

Erwan Gautier

Banque de France - Centre de Recherche

Multiple version iconThere are 3 versions of this paper

Date Written: July 1, 2010

Abstract

We highlight different stylized facts concerning wage stickiness. First, in France, the typical duration of a wage agreement is one year. Consequently, a Taylor-type (1980) 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 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: Wage Stickiness, Wage Bargaining, Minimum Wage, Downward Nominal Wage Rigidity

JEL Classification: J31, J50, E30

Suggested Citation

Avouyi-Dovi, Sanvi and Fougere, Denis and Gautier, Erwan, Wage Rigidity, Collective Bargaining and the Minimum Wage: Evidence from French Agreement Data (July 1, 2010). Banque de France Working Paper No. 287, Available at SSRN: https://ssrn.com/abstract=1653890 or http://dx.doi.org/10.2139/ssrn.1653890

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 Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

15, Boulevard Adolphie PINARD
92245 Malakoff Cedex
France
+33 1 4117 7713 (Phone)
+33 1 4117 7634 (Fax)

National Center for Scientific Research (CNRS)

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

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Erwan Gautier

Banque de France - Centre de Recherche ( email )

31 rue Croix des Petits Champs
75049 Paris Cedex 01
France

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