July 2013

IZA DP No. 7502: Minimum Wage and the Average Wage in France: A Circular Relationship?

published in: Economics Bulletin, 2013, 33 (3), 1832-1839

This paper investigates whether increases in the minimum wage in France have the same impact on the average wage when intended to preserve the purchasing power of the minimum wage as when intended to raise it. We find that the impact of the minimum wage on the average wage is strong, but differs depending on the indexation factor. We also find some empirical evidence of circularity between the average wage and the minimum wage.