Minimum wages and firm employment: evidence from a minimum wage reduction in Greece

Andreas Georgiadis, Ioannis Kaplanis and Vassilis Monastiriotis ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We investigate firm heterogeneity in responses to minimum wage changes leveraging on a policy reform in 2012 in Greece that introduced a youth sub-minimum through a sharp reduction in the minimum wage that was larger for youth. Using administrative linked employer–employee panel data and a difference-in-differences estimator, we find that, although wages decreased across all firms following the policy reform, adult wages decreased by more, whereas youth wages decreased by less in firms with a higher share of youth in employment. We also find that, in these firms, adult employment increased by more, while youth employment increased by less or even decreased and that these changes reflected mainly new hires rather than job separations. These heterogeneous responses to the change in the minimum wage across firms are not entirely consistent with the competitive model of the labour market.

Keywords: minimum wage; wages; firm employment (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 4 pages
Date: 2020-08-01
New Economics Papers: this item is included in nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published in Economics Letters, 1, August, 2020, 193. ISSN: 0165-1765

Downloads: (external link)
http://eprints.lse.ac.uk/104572/ Open access version. (application/pdf)

Related works:
Journal Article: Minimum wages and firm employment: Evidence from a minimum wage reduction in Greece (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:104572

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().