The Greek Labor Market during the Crisis: New Evidence on the Evolution of Wages, Employment, and Unemployment

Abstract

During the crisis, the Greek labor market went through major changes in terms of employment, unemployment and wages. The economic activity registered a cumulative decline of around 25%, weighting heavily on the labor market. The unemployment rate showed a substantial increase, with signs of persistence and the employment rate fell substantially. Utilizing a unique dataset, the European Union Structure of Earnings Survey (SES) the paper examines the evolution of wages over the period 2010–2014. During that period, the economic adjustment programs to deal with the chronic deficiencies of the Greek economy and restore sustainable public finances, to gain competitiveness and set the foundation for long-term growth, were implemented. Data refer to 2010, when the first elements of the program were beginning to be executed, and to 2014 when the crisis had already unfolded. Results point to a reduction of average wages across industries, even after controlling for personal and workplace characteristics. Amid a wage decrease at the mean, there is evidence of a divergent wage evolution between sectors of economic activity during the crisis. Furthermore, we find that wage premia that have persisted in the Greek economy during the same period are not disproportionately captured by employees at the upper end of the conditional wage distribution.

Citation

Papapetrou, E. and Tsalaporta, P. (2021), "The Greek Labor Market during the Crisis: New Evidence on the Evolution of Wages, Employment, and Unemployment", Vlachos, V., Bitzenis, A. and Sergi, B.S. (Ed.) Modeling Economic Growth in Contemporary Greece (Entrepreneurship and Global Economic Growth), Emerald Publishing Limited, Leeds, pp. 131-154. https://doi.org/10.1108/978-1-80071-122-820211010