We study the labor market effects of the 11% increase in the Greek National Minimum Wage implemented in February 2019. The reform marked a major reversal of the labor market adjustments introduced during the Greek sovereign debt crisis, including the large reduction in the minimum wage enacted in 2012. At the time of the policy change, unemployment remained close to 20%, raising concerns about its potential impact on employment and firm adjustment.

Our analysis uses administrative matched employer–employee data from the Greek social security system (EFKA), covering the vast majority of private-sector employment in Greece. We examine the consequences of the reform along three dimensions. First, we analyze its effects on wages, paying particular attention to spillover effects on workers whose pre-reform wages were above but close to the new minimum wage. Second, we study the effects on employment and worker retention, especially among low-wage workers. Third, we investigate whether the reform affected the reallocation of workers across firms with different levels of productivity and firm size.