Restaurant Prices and the Minimum Wage

60 Pages Posted: 21 Sep 2010

See all articles by Denis Fougère

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

Hervé le Bihan

Banque de France - Centre de Recherche

Multiple version iconThere are 3 versions of this paper

Date Written: July 1, 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: Price stickiness, minimum wage, inflation, restaurant prices

JEL Classification: E31, D43, L11

Suggested Citation

Fougere, Denis and Gautier, Erwan and Le Bihan, Herve, Restaurant Prices and the Minimum Wage (July 1, 2008). Banque de France Working Paper No. 216, Available at SSRN: https://ssrn.com/abstract=1679676 or http://dx.doi.org/10.2139/ssrn.1679676

Denis Fougere (Contact Author)

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

Herve Le Bihan

Banque de France - Centre de Recherche ( email )

31 rue Croix des Petits Champs
Room 41-1391
75049 Paris Cedex 01
France

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
29
Abstract Views
687
PlumX Metrics