Keywords
wage rigidity; wage-setting behavior; survey data
Abstract
We investigate the wage-setting behavior of French companies using an ad-hoc survey specifically conducted for this study. Our main results are the following. i) Wages are changed infrequently. 75% of firms change their wages once a 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, the latter are partially transmitted into prices. Companies also adopt cost-cutting strategies. The wage of newly hired employees plays an important role in this adjustment.
Acknowledgments
The views expressed in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Banque de France.
Recommended Citation
Montornes, J., & Sauner-Leroy, J. (2024). Wage-setting Behavior in France: Additional Evidence from an Ad-hoc Survey. Journal of Banking and Financial Economics, 2015(3), 5-23. https://doi.org/10.7172/2353-6845.jbfe.2015.1.1
First Page
5
Last Page
23
Page Count
19
Received Date
23 May 2014
Revised Date
20 January 2015
Accept Date
16 February 2015
Online Available Date
26 March 2015
DOI
10.7172/2353-6845.jbfe.2015.1.1
JEL Code
E24; J3
Publisher
University of Warsaw