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Wage-setting Behavior in France: Additional Evidence from an Ad-hoc Survey

Jérémi Montornes and Sauner-Leroy, J-B.

Working papers from Banque de France

Abstract: We investigate the wage-setting behavior of French companies using an ad-hoc survey conducted specifically for this study. Our main results are the following. i) Wages are changed infrequently. The mean duration of wage contracts is one year. Wage changes occur at regular intervals during the year and are concentrated in January and July. ii) We find a lower degree of downward real wage rigidity and nominal wage rigidity in France compared to the European average. iii) About one third of companies have an internal policy to grant wage increases according to inflation. iv) When companies are faced with adverse shocks, only a partial response is transmitted into prices. Companies also adopt cost-cutting strategies. The wage of newly hired employees plays an important role in this adjustment.

Keywords: Wage Rigidity; Wage-setting Behavior; Survey Data. (search for similar items in EconPapers)
JEL-codes: E24 J3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eur, nep-lab and nep-mac
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:282

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