Yannis Katsaros[1] , Georgios Kolias[2] , Kostantinos Karamanis[3] , Christos Gogos[4]
Abstract
This paper re-examines Greece's 2012 statutory minimum-wage reduction—the largest downward adjustment in an advanced economy—to assess its impact on earnings inequality. Using confidential quarterly micro-data from the Unified Social Security Authority (EFKA) for 2009-2013, we compute bootstrap-corrected Gini coefficients and percentile wage ratios and test for structural breaks with a Chow framework. The estimates reveal a significant and durable rise in inequality: the Gini increases by 2.3 points within two quarters, the P90/P10 ratio climbs by 9 percent, and the break-point test (F = 7.18, p = 0.0045) confirms a regime shift in 2012 Q1. Employment levels remain largely unchanged, indicating that the policy reallocated income rather than jobs. By mapping the full distributional response, our analysis extends Georgiadis et al. (2018) and highlights the equity costs of downward nominal flexibility. The findings carry fresh relevance as Greece and other EU members debate minimum-wage increases, living-wage directives and policy reversals of crisis-era labour reforms.
[1] Department of Accounting and Finance, Institute of Economic Analysis and Solidarity Economy, University of Ioannina, Greece, i.katsaros@uoi.gr
[2] Department of Accounting and Finance, Institute of Economic Analysis and Solidarity Economy, University of Ioannina and Hellenic Open University, Greece, koliasg@uoi.gr
[3] Department of Accounting and Finance, Institute of Economic Analysis and Solidarity Economy, University of Ioannina and Hellenic Open University, Greece, kkaraman@uoi.gr
[4] Department of Accounting and Finance, Institute of Economic Analysis and Solidarity Economy, University of Ioannina, Greece, cgogos@uoi.gr