IESET.
Hypotheses·labour·labour_reform_greece_2010_2014_troika_internal_devaluation

Greece's 2010-2014 troika-program labour reforms (minimum-wage cut 22% / 32% youth, collective-bargaining decentralisation, dismissal-cost reduction) effected a permanent real-wage decline of at least 15% relative to a synthetic control of euro-area peers, but produced no statistically distinguishable improvement in unit-labour-cost-adjusted employment by 2017.

PARTIALengine/runs/labour_reform_greece_2010_2014_troika_internal_devaluation

PARTIAL — mean_gap=-8.777, |gap|/pre_sd=17, p_perm=0.429 (gap below 0.5×pre_sd or placebo p≥0.10)

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When minimum wages rise high relative to normal local pay, do lower-skill workers keep their jobs, or does hiring fall at the margin?

plain answer

The evidence is suggestive but not decisive. mean_gap=-8.777, |gap|/pre_sd=17, p_perm=0.429 (gap below 0.5×pre_sd or placebo p≥0.10)

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 7 country or place units from 2005 to 2018, using a synth did design, with fixed effects for country and year.

what was measured
What changed
  • Greece troika labour measures
What we checked
  • Real wage index
  • Employment to population ratio
  • Unit labour cost
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/labour_reform_greece_2010_2014_troika_internal_devaluation
1007550250200520122018GRCPRTESPITAIRLFRADEU
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_wage_index across 7 sampled countries over 2005–2018.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_reform_greece_2010_2014_troika_internal_devaluation. Published chart will be generated from engine/runs/labour_reform_greece_2010_2014_troika_internal_devaluation/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T10:51:39Z

Greece's 2010-2014 troika-program labour reforms (minimum-wage cut 22% / 32% youth, collective-bargaining decentralisation, dismissal-cost reduction) effected a permanent real-wage decline of at least 15% relative to a synthetic control of euro-area peers, but produced no statistically distinguishable improvement in unit-labour-cost-adjusted employment by 2017.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if synth-DiD gap on real-wage index < -15.0 pp by 2017 AND employment-rate gap is not statistically distinguishable from zero at p<0.10. REFUTED if the wage gap is shallower than -10 pp OR if the employment gap is significantly positive at p<0.10. PARTIAL if the wage gap is met but employment also rises significantly.

formal test & threshold
test:      Synth-DiD on Greek real-wage index, employment rate, and ULC 2010-2017 vs euro-area donor pool, placebo permutation at p<0.10.

Method

Template
synth_did
Fixed effects
country, year
Clustering
country
Sample
7 countries · 2005 – 2018
Evidence type
associational

Data

VariableSourceTransform
real_wage_index
outcome
oecd:DSD_EARNtier 2
log
employment_to_population_ratio
outcome
world_bank_wdi:SL.EMP.TOTL.SP.ZStier 2
level
unit_labour_cost
outcome
oecd:DSD_PDBtier 2
log
greece_troika_labour_measures
treatment
constructed:indicator for 2010-Q2 onwards Greek MoU labour measurestier 5
indicator
gdp_per_capita_real
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
ecb_policy_rate
control
ecb:FMtier 1
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_reform_greece_2010_2014_troika_internal_devaluation

Verdict: PARTIAL — mean_gap=-8.777, |gap|/pre_sd=17, p_perm=0.429 (gap below 0.5×pre_sd or placebo p≥0.10)

Pre-registration

  • Claim: Greece's 2010-2014 troika-program labour reforms (minimum-wage cut 22% / 32% youth, collective-bargaining decentralisation, dismissal-cost reduction) effected a permanent real-wage decline of at least 15% relative to a synthetic control of euro-area peers, but produced no statistically distinguishable improvement in unit-labour-cost-adjusted employment by 2017.
  • Falsification rule: SUPPORTED if synth-DiD gap on real-wage index < -15.0 pp by 2017 AND employment-rate gap is not statistically distinguishable from zero at p<0.10. REFUTED if the wage gap is shallower than -10 pp OR if the employment gap is significantly positive at p<0.10. PARTIAL if the wage gap is met but employment also rises significantly.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: GRC
  • event_year: 2010
  • n_donors: 6
  • donor_weights (top): {'ITA': 0.6022, 'DEU': 0.3978, 'PRT': 0.0, 'ESP': 0.0, 'IRL': 0.0}
  • pre_rmse: 0.8762812340190624
  • pre_period_sd: 0.514234576822679
  • mean_post_gap: -8.777172684264722
  • end_period_gap: -9.067126958480067
  • post_period_years: [2010, 2018]
  • placebo_p_value: 0.42857142857142855
  • n_placebos: 6
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • world_bank_wdi:SL.EMP.TOTL.SP.ZS → employment_to_population_ratio (outcome, n=8071)
  • world_bank_wdi:NY.GDP.PCAP.KD → gdp_per_capita_real (controls, n=14066)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, n=10714)

Generated by scripts/run_synth_did.py at 2026-04-30T10:51:39+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Treatment dated 2010-Q2 onwards through successive MoU packages. Greek case is the canonical "internal devaluation failed" study — labour shed price but not quantity. The paired ULC and employment outcomes are the steelman discipline.

Authored framework. Read the transparency note.