Industrial Relations Reform, Firm‐Level Bargaining and Nominal Wage Floors

We investigate the impact of the 2011 industrial relations reform in Greece that made firms with less than 50 employees eligible to participate to firm‐level bargaining. Matching administrative contractual data with longitudinal firm‐level data we identify firms affected and not affected by the reform. We find that during the first post‐reform year, affected firms with less than 50 employees experienced a 4.8 per cent increase in the probability of firm‐level contracting and a 12 per cent drop in wage floors relative to not affected firms. We also report estimates regarding the post‐reform employment effect of firm‐level bargaining.