Earnings dynamics through boom, crisis, and recovery: Evidence from Greece

This paper documents the evolution of labor earnings and earnings dynamics in Greece during 2002-2023 using administrative matched employer-employee data from the Greek social security system. The data span the expansion of the 2000s, the deep recession of 2009-2013, and the subsequent recovery. We show that earnings, volatility, and inequality closely tracked macroeconomic conditions. Real earnings rose during the pre-crisis expansion, declined sharply during the recession (particularly among lower earners) and only partially recovered afterward. Earnings volatility and downside risk increased substantially during the crisis, while inequality rose both in the cross-section and within cohorts. Workers entering the labor market during the recession experienced unusually weak initial earnings and persistently lower subsequent earnings. Using regional variation in unemployment rates, we show that weaker local labor-market conditions at entry are associated with lower early-career earnings.