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

10 Pages Posted: 23 Aug 2013

See all articles by Gilbert Cette

Gilbert Cette

Banque de France

Valérie Chouard

Banque de France

Gregory Verdugo

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES)

Abstract

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.

Keywords: average wage, minimum wage, France

JEL Classification: E24, J31, J58

Suggested Citation

Cette, Gilbert and Chouard, Valérie and Verdugo, Gregory, Minimum Wage and the Average Wage in France: A Circular Relationship?. IZA Discussion Paper No. 7502, Available at SSRN: https://ssrn.com/abstract=2314796 or http://dx.doi.org/10.2139/ssrn.2314796

Gilbert Cette (Contact Author)

Banque de France ( email )

Paris
France

Valérie Chouard

Banque de France ( email )

Paris
France

Gregory Verdugo

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES) ( email )

106-112 Boulevard de l'hopital
106-112 Boulevard de l'Hôpital
Paris Cedex 13, 75647
France

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