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Skills and wage inequality in Greece: evidence from matched employer-employee data, 1995-2002

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  • Rebekka Christopoulou

    (Cornell University)

  • Theodora Kosma

    (Bank of Greece)

Abstract

This paper examines changes in the Greek wage distribution over 1995-2002 and the role of skills in these changes using a matched employer-employee data set. This data set enables us to account for firm heterogeneity and obtain a more refined picture of the impact of skills. The methodology adopted is the Machado-Mata decomposition technique, which separates the part of wage changes that is due to changes in the job/employer and employee characteristics from the part due to changes in the returns to these characteristics. Our results indicate that the role of skills has been decisive. The skill return effects in combination with the composition effects of tenure, which are arguably responsive to economic developments and market conditions, have had an important contribution to the changes in the Greek wage distribution. On the other hand, the impact of predetermined demographic changes, as those captured by the age and education composition effects, has been relatively milder.

Suggested Citation

  • Rebekka Christopoulou & Theodora Kosma, 2011. "Skills and wage inequality in Greece: evidence from matched employer-employee data, 1995-2002," Working Papers 123, Bank of Greece.
    • Handle: RePEc:bog:wpaper:123
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    More about this item

    Keywords

    Returns to skill; Wage inequality; Quantile regression;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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