Restaurant Prices and the Minimum Wage

Denis Fougere (), Erwan Gautier () and Hervé LE BIHAN ()

No 4070, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We examine the effect of the minimum wage on restaurant prices. We contribute to both the study of economic impact of the minimum wage and to the micro patterns of price stickiness. For that purpose, we use a unique dataset of individual price quotes collected to calculate the Consumer Price Index in France and we estimate a price rigidity model based on a flexible (S; s) rule. We find a positive and significant impact of the minimum wage on prices. The effect of the minimum wage on prices is however very protracted. The aggregate impact estimated with our model takes more than a year to fully pass through to retail prices.

Keywords: price stickiness; minimum wage; inflation; restaurant prices (search for similar items in EconPapers)
JEL-codes: E31 D43 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-lab, nep-mac and nep-ure
Date: 2009-03
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Related works:
Working Paper: Restaurant Prices and the Minimum Wage (2008)
Working Paper: Restaurant Prices and the Minimum Wage (2008)
Working Paper: RESTAURANT PRICES AND THE MINIMUM WAGE (2008)
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