Working Paper Series no. 587: The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France.

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, we use a unique dataset containing about 48,000 occupation-specific wage floors, in more than 340 French industries over the period 2006-2014. We 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, 0.3 and 0.25 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.

Erwan Gautier, Denis Fougère and Sébastien Roux
April 2016

Classification JEL : J31, J51, E24

Keywords : minimum wage, collective bargaining, wages.