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Restaurant Prices and the Minimum Wage

Denis Fougere (), Erwan Gautier () and Hervé Le Bihan ()

No 4070, IZA Discussion Papers from Institute of Labor Economics (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: restaurant prices; price stickiness; minimum wage; inflation (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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Published in: Journal of Money, Credit and Banking, 2010, 42 (7), 1199-1234

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http://ftp.iza.org/dp4070.pdf (application/pdf)

Related works:
Journal Article: Restaurant Prices and the Minimum Wage (2010) Downloads
Journal Article: Restaurant Prices and the Minimum Wage (2010) Downloads
Working Paper: Restaurant Prices and the Minimum Wage (2009) Downloads
Working Paper: RESTAURANT PRICES AND THE MINIMUM WAGE (2008) Downloads
Working Paper: Restaurant Prices and the Minimum Wage (2008) Downloads
Working Paper: Restaurant Prices and the Minimum Wage (2008) Downloads
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