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The Minimum Wage in Greece: A Review of Institutional Features, Developments and Effects Between 1975 and 2023

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  • Nicolitsas Daphne

    (Department of Economics, 37777 University of Crete , Rethimno, Greece)

Abstract

This paper takes a historical perspective and assesses the evolution of the institutional features in setting the minimum wage in Greece between 1975 and 2023. It also evaluates developments regarding the minimum wage level, its bite and alignment with productivity. The paper reviews the limited available empirical literature on the association of the minimum wage with labour market outcomes (average wages, employment, inequality). It presents new estimates of the elasticity of average wages to the minimum wage. One of the paper’s key points is that the minimum wage setting mechanism has changed over time as the economic environment has changed. Reviewing the evolution of the minimum wage over time to evaluate whether the minimum wage follows productivity developments and whether the minimum wage bites leads to the second and third takeaways of the paper. The minimum wage follows productivity developments over the longer term but not always in the short term. The bite of the minimum wage is high and appears to be higher when government intervention in setting the minimum wage is stronger. As for the impact of the minimum wage on average wages, the new estimates of the elasticity of the average to the minimum wage the paper provides, use more precisely measured wage rates, which show a high elasticity of average to minimum wages. Finally, the review of the existing literature on the employment effects of the minimum wage shows that, as in other countries, the results are mixed with modest negative or no effects.

Suggested Citation

  • Nicolitsas Daphne, 2025. "The Minimum Wage in Greece: A Review of Institutional Features, Developments and Effects Between 1975 and 2023," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 245(1-2), pages 79-111.
    • Handle: RePEc:jns:jbstat:v:245:y:2025:i:1-2:p:79-111:n:1005
    DOI: 10.1515/jbnst-2023-0041
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    References listed on IDEAS

    as
    1. Andriopoulou Eirini & Karakitsios Alexandros, 2022. "Unemployment transitions and the role of minimum wage: From pre-crisis to crisis and recovery," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-26, January.
    2. Peter Dolton & Chiara Rosazza Bondibene, 2012. "The international experience of minimum wages in an economic downturn [The tail of two countries: minimum wage and employment in France and the United-States]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 27(69), pages 99-142.
    3. Georgiadis, Andreas & Kaplanis, Ioannis & Monastiriotis, Vassilis, 2020. "Minimum wages and firm employment: Evidence from a minimum wage reduction in Greece," Economics Letters, Elsevier, vol. 193(C).
    4. Eugenia Fotoniata & Thomas Moutos, 2010. "Greece: Neglect and Resurgence of Minimum Wage Policy," Chapters, in: Daniel Vaughan-Whitehead (ed.), The Minimum Wage Revisited in the Enlarged EU, chapter 7, Edward Elgar Publishing.
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    8. Theano Kakoulidou & Panagiotis Konstantinou & Thomas Moutos, 2018. "The Subminimum Wage Reform in Greece and the Labour-Labour Substitution Hypothesis," CESifo Working Paper Series 7273, CESifo.
    9. Boeri, Tito, 2012. "Setting the minimum wage," Labour Economics, Elsevier, vol. 19(3), pages 281-290.
    10. Stelios Roupakias, 2025. "Employment and Distributional Effects of Greece's National Minimum Wage," LABOUR, CEIS, vol. 39(1), pages 43-60, March.
    11. Georgiadis, Andreas & Kaplanis, Ioannis & Monastiriotis, Vassilis, 2018. "The impact of minimum wages on wages and employment: evidence from Greece," LSE Research Online Documents on Economics 91959, London School of Economics and Political Science, LSE Library.
    12. Richard Dickens, 2023. "How are minimum wages set?," IZA World of Labor, Institute of Labor Economics (IZA), pages 2112-2112, September.
    13. Joseph J. Sabia, 2008. "Minimum wages and the economic well-being of single mothers," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(4), pages 848-866.
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    15. Bechlioulis, Alexandros & Chletsos, Michael, 2021. "The differentiated effects of minimum wage reforms on unemployment Evidence from the Greek labor market," MPRA Paper 109327, University Library of Munich, Germany.
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    More about this item

    Keywords

    minimum wage; wages; bargaining; institutions;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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