Restaurant Prices and the Minimum Wage

Denis Fougere (), Erwan Gautier and Hervé LE BIHAN

No 6892, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: Inflation; Minimum wage; Price stickiness; Restaurant prices (search for similar items in EconPapers)
JEL-codes: D43 E31 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mkt and nep-ure
Date: Written 2008-06

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