The Subminimum Wage Reform in Greece and the Labour-Labour Substitution Hypothesis

Kakoulidou, Theano; Konstantinou, Panagiotis; Moutos, Thomas

doi:10.2139/ssrn.3338598

Cited by 2 publications

(2 citation statements)

References 23 publications

(30 reference statements)

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“…Concerning minimum wage in Greece, Yannelis (2014) and Kakoulidou et al, (2018) focus on the 2012 minimum wage reform and its impact on employment and unemployment dynamics. A substitution channel between workers below and above 25 years is found by Yannelis due to the youth subminimum wage introduction.…”

Section: Literature Reviewmentioning

confidence: 99%

Unemployment transitions and the role of minimum wage: From pre-crisis to crisis and recovery

Andriopoulou

Καρακίτσιος

2022

IZA Journal of Labor Policy

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During the last decade, unemployment in Greece climbed up to 28%, almost quadrupling due to the economic crisis that hit Greece. In the present paper, we examine the determinants of the unemployment dynamics and the impact of the minimum wage on the probability of making a transition into and out of unemployment. We use micro-level data from the Greek Labour Force Survey (LFS) of the period 2004 to 2019 and control for several demographic factors, macro-economic conditions, regional differences, and changes in the statutory minimum wage. The results suggest that individual-level characteristics play an important role in making a transition into or out of unemployment. Changes in the real minimum wage are estimated to have either a statistically insignificant or a very small impact on unemployment entries and exits. Further, the impact of economy's growth rate follows the theoretical predictions as higher growth rates increase unemployment outflows and decrease inflows, while the regional differences are also important. Our findings persist even when we split the sample in three periods (pre-crisis, crisis, recovery). The results have important policy implications. Given that the disemployment effect of the minimum wage seems to be very limited in the Greek labor market, while the socioeconomic characteristics and regional characteristics play an important role, improving the skills of individuals through the educational system and reskilling or up-skilling programs while targeting specific regions may facilitate labor market mobility.

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Section: Literature Reviewmentioning

confidence: 99%

Unemployment transitions and the role of minimum wage: From pre-crisis to crisis and recovery

Andriopoulou

Καρακίτσιος

2022

IZA Journal of Labor Policy

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“…The PASOK government formally cut minimum wages by 22 percent in 2012, in tandem with Greece's second EU bailout. After this, the monthly minimum wage remained stagnant at roughly €684 for seven years (Eurostat 2019b).¹¹ In addition, the government reduced both employee and employer social security contributions as well as introduced special sub-minimal wages for young workers aged 18-25 in an effort to encourage employment (Kakoulidou et al 2018). Moreover, PASOK also introduced substantial reforms to Greek wage-rate bargaining procedures, in order to move away from sectoral-level collective wage-rate agreements to a system where wages would be increasingly negotiated at the firm level: This included, most importantly, new procedures for the setting of future minimum wages (Lyberaki et al 2017).…”

Section: Policies and Conflict Lines Surrounding Internal Adjustment ...mentioning

confidence: 99%

The Politics of Bad Options

Walter

Ray

Redeker

2020

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Why did the Eurozone crisis prove to be so difficult to resolve? Why was it resolved in a manner in which some countries bore a much larger share of the pain than other countries? Why did no country leave the Eurozone rather than implement unprecedented austerity? Who supported and who opposed the different policy options in the crisis domestically, and how did the distributive struggles among these groups shape crisis politics? Building on macro-level statistical data, original survey data from interest groups, and qualitative comparative case studies, this book argues and shows that the answers to these questions revolve around distributive struggles about how the costs of the Eurozone crisis should be divided among countries, and among different socioeconomic groups within countries. Together with divergent but strongly held ideas about the “right way” to conduct economic policy and asymmetries in the distribution of power among actors, severe distributive concerns of important actors lie at the root of the difficulties of resolving the Eurozone crisis as well as the difficulties to substantially reform European Monetary Union (EMU). The book provides new insights into the politics of the Eurozone crisis by emphasizing three perspectives that have received scant attention in existing research: A comparative perspective on the Eurozone crisis by systematically comparing it to previous financial crises, an analysis of the whole range of policy options, including the ones not chosen, and a unified framework that examines crisis politics not just in deficit-debtor, but also in surplus-creditor countries.

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The Subminimum Wage Reform in Greece and the Labour-Labour Substitution Hypothesis

Cited by 2 publications

References 23 publications

Unemployment transitions and the role of minimum wage: From pre-crisis to crisis and recovery

Unemployment transitions and the role of minimum wage: From pre-crisis to crisis and recovery

The Politics of Bad Options

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