Wage Reforms and Equality Gains: Evidence from Greece

Aikaterini Karadimitropoulou, Tryfonas Christou, Michael Chletsos and Alexandros P. Bechlioulis

GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe from Hellenic Observatory, LSE

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.

Keywords: income inequality; wage inequality; minimum wage reform; modern difference-in-difference analysis; quantile regression (search for similar items in EconPapers)
JEL-codes: C31 J08 J31 (search for similar items in EconPapers)
Date: 2025-07
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Persistent link: https://EconPapers.repec.org/RePEc:hel:greese:209

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