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Wage-setting behavior in France: additional evidence from an ad-hoc survey

Jérémi Montornes and Sauner-Leroy, Jacques-Bernard

No 1102, Working Paper Series from European Central Bank

Abstract: We investigate the wage-setting behaviour 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 down-ward 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 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. JEL Classification: E3, D4, L11

Keywords: survey data; wage-setting behavior; wage rigidity (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec and nep-lab
Date: 2009-10
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Working Paper: Wage-setting Behavior in France: Additional Evidence from an Ad-hoc Survey (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20091102

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