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Wage Reforms and Equality Gains: Evidence from Greece

Author

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

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

  • Aikaterini E. Karadimitropoulou & Tryfonas Christou & Michael Chletsos & Alexandros P. Bechlioulis, 2025. "Wage Reforms and Equality Gains: Evidence from Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 209, Hellenic Observatory, LSE.
    • Handle: RePEc:hel:greese:209
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    References listed on IDEAS

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    Cited by:

    1. Peter Sanfey & Dimitris Sourvanos, 2026. "Out of the abyss: Has Greece fully recovered from the crisis?," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 220, Hellenic Observatory, LSE.
    2. Sanfey, Peter & Sourvanos, Dimitris, 2026. "Out of the abyss: has Greece fully recovered from the crisis?," LSE Research Online Documents on Economics 138857, London School of Economics and Political Science, LSE Library.

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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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