LABOUR
MARKET ADJUSTMENTS AND REFORMS IN GREECE DURING THE CRISIS: MICROECONOMIC
EVIDENCE FROM THE THIRD WAVE OF THE WAGE DYNAMICS SURVEY
Theodora Kosma
Bank of
Greece
Evangelia Papapetrou
Bank of
Greece
Georgia Pavlou
Bank of
Greece
Christina Tsochatzi
Bank of
Greece
Pinelopi Zioutou
Bank of
Greece
Abstract
The recession that
followed the global financial crisis and the sovereign debt crisis resulted in
large falls in output and rises in unemployment across Europe. In this context,
many countries implemented significant reforms of their labour market. In order
to analyse the impact of labour market reforms and, in particular, to
investigate, how firms adjusted to the shocks affecting them, the European
System of Central Banks (ESCB) conducted a third wave of the Wage Dynamics
Network (WDN3) survey in 2014-15. This paper describes the main findings of the
Greek WDN3 survey. The results show that the decline in economic activity,
during the period 2010-2013, had a significant negative impact on Greek firms’
activity. Greek firms reacted to the shocks affecting them by adjusting both
labour input and wages and reforms seem to have made it easier for this adjustment
to take place.
Keywords: Survey data, wage adjustment,
employment adjustment, labour market reforms
JEL Classification: E24, J30, J50
Acknowledgements: We would like to thank Costas
Kanellopoulos for his useful and constructive comments and suggestions during
the initial phases of the preparation of this paper as well as for his valuable
help in the organization and conduct of the survey. We would also like to thank
Elli Nobeli for excellent research assistance as well as Konstantinos
Kanellopoulos. Finally, we thank Juan Francisco Jimeno, Heather Gibson, Hiona
Balfoussia and the participants of the Wage Dynamics Network meetings for their
helpful comments. The views expressed in this paper are those of the authors
and do not necessarily reflect those of the Bank of Greece.
Correspondence:
Theodora Kosma
Economic Analysis and Research
Bank of Greece,
21 E. Venizelos Ave.,
10250 Athens, Greece
Tel.: +30 210 320 2642
Email: tkosma@bankofgreece.gr