The International Journal of Human Resource Management
 

DOI: dx.doi.org/10.1080/09585192.2015.1011190

favourable employment opportunities than “outsiders”. More specifically, the main 

difference is that insiders have protected jobs while outsiders have temporary 

positions in formal or informal employment or are unemployed. Hence, insiders 

have bargaining power and demand high wages while there are unemployed 

outsiders queuing for jobs (Gottfries et al., 1999). As we see, many researchers 

examine the distinction between insiders and outsiders and its effect on 

employment, unemployment and other macroeconomic activities. This study will 

investigate whether the insider-outsider model can be applied to the Greek labour 

market reality? Does labour regulation help insiders at the expense of outsiders 

and unemployment remains high particularly among vulnerable groups which are 

not effectively protected?  

This paper uses an original dataset for 206 workplaces in Thessaly (Greece), to study 

consequences of Greece’s employment protection law (EPL) and national wage minimum for temporary employment. We find higher temporary employment rates especially among a “grey” market group of workplaces that pay low wages and avoid the national wage minimum. 

A similar factor boosts family employment. We also find that EPL “matters”, in particular, managers who prefer temporary contracts because temps are less protected definitely employ more temps. We discuss whether temporary and family work is a form of escape from regulation for less prosperous firms.