The Behaviour of French Firms During the Crisis: Evidence from the Wage Dynamics Network Survey

41 Pages Posted: 23 Oct 2015

See all articles by Christophe Jadeau

Christophe Jadeau

Banque de France

Edouard Jousselin

Banque de France

Sebastien Roux

Banque de France

Gregory Verdugo

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

Date Written: October 2015

Abstract

In coordination with the ECB and 24 other national central banks of the European Union, the Banque de France interrogated 1150 French firms to understand how the crisis affected their economic environment and their human resources practices during the 2010-2013 period. A majority of workers were employed by firms which indicate that their activity was mostly affected by a decrease in demand considered as long-lasting by more than 40% of them, especially in the construction sector and among small firms. In contrast, less than 20% of firms (weighted by their employment) report that the unavailability of credit had an effect on their activity. Over the period, despite the economic downturn, the amount of total costs increased for 70% of firms (weighted by their employment) mainly through an increase in labour costs and secondly in the cost of supplies. In particular, base wages continued to increase for a large share of firms, suggesting strong downward wage rigidities. Many firms indicate substantial difficulties in adjusting the labour force: throughout the crisis it became more difficult to hire qualified employees, to adjust working hours or to move workers to different job positions. The joint presence of difficulties in finding employees and unemployment growth suggest that structural unemployment increased in France in recent years. Other factors considered as significantly constraining for employment growth by a large majority of firms are uncertainty about economic conditions, risks that labour laws are changed, high payroll taxes and firing costs.

Keywords: wage adjustment, France, wage dynamics network

JEL Classification: E24, D4, L11

Suggested Citation

Jadeau, Christophe and Jousselin, Edouard and Roux, Sebastien and Verdugo, Gregory, The Behaviour of French Firms During the Crisis: Evidence from the Wage Dynamics Network Survey (October 2015). Available at SSRN: https://ssrn.com/abstract=2677646 or http://dx.doi.org/10.2139/ssrn.2677646

Christophe Jadeau (Contact Author)

Banque de France ( email )

Paris
France

Edouard Jousselin

Banque de France ( email )

Paris
France

Sebastien Roux

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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