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Working Paper Series no. 216: Restaurant Prices and the Minimum Wage

By Fougère Denis, Gautier Erwan, Le Bihan Hervé

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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.

Denis Fougère, Erwan Gautier and Hervé Le Bihan
July 2008

Classification JEL : E31, D43, L11

Keywords : Price stickiness, minimum wage, inflation, restaurant prices.

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publication
Working Paper Series no. 216: Restaurant Prices and the Minimum Wage
  • Published on 07/01/2008
  • EN
  • PDF (845.65 KB)
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Updated on: 06/12/2018 10:59