Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/223759 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13317
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Over the 1967-2015 period, net wage inequality has decreased in France by 25%, in contrast to the significant increase experienced by most developed countries. Less well known is the fact that labor cost inequality has actually increased by 8% over the same period. We show that, (a) standard demand-side explanations for the rise in inequality apply in France when tested using measures of labor cost (as they should be); (b) reforms to payroll taxation, jointly with increases in the minimum wage, can explain a large part of the decrease in net wage inequality, in the context of increasing market inequality.
Subjects: 
wage inequality
labor cost
payroll tax
Social Security contributions
tax incidence
JEL: 
I24
J24
J31
Document Type: 
Working Paper

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