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

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.Wage Rigidity, Wage-setting Behavior, Survey Data.

Firms’ wage policies during the crisis: survey findings.

Two surveys on wage-setting practices conducted in 2007 and 2009 suggest that base wages are relatively sticky in France and that, in response to the signifi cant decline in activity, firms have adopted strategies aimed mainly at reducing labour costs and the variable components of compensation.Wage-setting, wage stickiness, survey data.

Has the EU's Single Market Programme Fostered Competition? Testing for a Decrease in Mark-up Ratios in EU Industries

We use a panel approach, covering 10 EU Member States over the period 1981-99, for each of three major industry groups (manufacturing, construction and services) and 18 more detailed industries to test whether the EU's Single Market Programme has led to a reduction in firms' mark-ups over marginal costs. We address explicitly the uncertainty with respect to the timing of the changeover and allow for a possibly continuous regime shift in a smooth transition analysis. Where regime shifts can be found, the velocity of transition is extremely high, making the linear model a justifiable approximation. We also test for discrete structural breaks in the time window from 1986 to 1996, taking up endogeneity concerns in a generalized method of moments framework. Mark-up reductions are found for aggregate manufacturing (although it is also suggested that mark-ups increased in some manufacturing industries in the precompletion period at the end of the 1980s) and also for construction. In contrast, mark-ups have gone up in most service industries since the early 1990s, which confirms the weak state of the Single Market for services and suggests that anti-competitive defence strategies have emerged in EU service industries. Copyright Blackwell Publishing Ltd and the Department of Economics, University of Oxford 2007.