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Wage reforms and equality gains: evidence from Greece

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  • Bechlioulis, Alexandros P.
  • Chletsos, Michael
  • Christou, Tryfonas
  • Karadimitropoulou, Aikaterini E.

Abstract

This paper examines whether minimum wage reforms affect income inequality among low-wage workers. We construct a novel “within-occupation” measure of wage dispersion, using a Greek dataset between 2010 and 2020. Using modern difference-in-differences analysis for causal inference, our findings show non-symmetrical effects on wage dispersion when a minimum wage reform is imposed. In particular, the minimum wage cut of 2012 did not alter the wage dispersion of low-wage workers, while the minimum wage increase of 2019 led to a decrease in wage inequality at the bottom segment of the labor market. Our paper equips policymakers with a solid understanding of the effects of minimum wage reforms on wage inequality and highlights the important role of wage rigidities in shaping these effects.

Suggested Citation

  • Bechlioulis, Alexandros P. & Chletsos, Michael & Christou, Tryfonas & Karadimitropoulou, Aikaterini E., 2025. "Wage reforms and equality gains: evidence from Greece," LSE Research Online Documents on Economics 129622, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:129622
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    Keywords

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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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