Labour Market Adjustment and Labour Market Reforms in Greece During the Crisis: Findings from the Third Wave of the Wage Dynamics Survey

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 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 survey in 2014-2015. This paper describes the main findings of the Greek 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 shocks 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