Understanding Wage Floor Setting in Industry-Level Agreements: Evidence from France

51 Pages Posted: 31 Oct 2016

See all articles by Denis Fougère

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

Sébastien Roux

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

Abstract

This paper examines empirically how industry-level wage floors are set in French industry-level wage agreements and how the national minimum wage (NMW) interacts with industry-level wage bargaining. For this, the authors use a unique dataset containing about 50,000 occupation-specific wage floors in 365 French industries over the period 2007-2015. They find that the NMW has a significant impact on the seasonality and on the timing of the wage bargaining process. Inflation, past sectoral wage increases and real NMW increases are the main drivers of wage floor adjustments; elasticities of wage floors with respect to these macro variables are 0.6, 0.4 and 0.2 respectively. Wage floor elasticities to inflation and to the NMW both decrease along the wage floor distribution but are still positive for all levels of wage floors.

Keywords: collective bargaining, wages, minimum wage

JEL Classification: J31, J51, E24

Suggested Citation

Fougere, Denis and Fougere, Denis and Gautier, Erwan and Roux, Sébastien, Understanding Wage Floor Setting in Industry-Level Agreements: Evidence from France. IZA Discussion Paper No. 10290, Available at SSRN: https://ssrn.com/abstract=2861075 or http://dx.doi.org/10.2139/ssrn.2861075

Denis Fougere (Contact Author)

National Center for Scientific Research (CNRS)

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IZA Institute of Labor Economics

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Centre for Economic Policy Research (CEPR) ( email )

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Erwan Gautier

Banque de France - Centre de Recherche ( email )

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75049 Paris Cedex 01
France

Sébastien Roux

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

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Malakoff Cedex, 1 92245
France

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