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Empirical Economics

, Volume 52, Issue 1, pp 59–77 | Cite as

The wage curve before and during the Greek economic crisis

  • Joan Daouli
  • Michael Demoussis
  • Nicholas GiannakopoulosEmail author
  • Ioannis Laliotis
Article

Abstract

Using cross-sectional data from the Labour Force Survey, we investigate whether a wage curve, i.e. a negative relationship between real wages and regional unemployment, could be estimated in the Greek labour market and in the period 1999–2014. Adopting individual static and regional dynamic specifications, our results do not support the existence of such a relationship despite the extensive macroeconomic adjustment of real wages after 2009. However, allowing for period-specific heterogeneous slopes, we find that a negative relationship between wages and regional unemployment emerged in the period 2010Q2–2011Q4 which however was short-lived. This relationship appears to be exclusively due to the restructuring of the collective bargaining regime and the reduction in the national minimum wages, both of which were implemented in the private sector.

Keywords

Wage curve Regional unemployment Reforms Crisis Greece 

JEL Classification

J31 E24 J60 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  • Joan Daouli
    • 1
  • Michael Demoussis
    • 1
  • Nicholas Giannakopoulos
    • 1
    Email author
  • Ioannis Laliotis
    • 2
  1. 1.Department of EconomicsUniversity of PatrasPatrasGreece
  2. 2.University of SurreySurreyUK

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