Does the Greek labour market work? Crisis and adjustment across the Greek regions.
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Speaker
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Dr Vassilis Monastiriotis
Associate Professor in the Political Economy of Southeast, London School of Economics
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Chair
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Dr Bernard H. Casey
Principal Research Fellow, Institute for Employment Research, University of Warwick; Visiting Senior Fellow, Hellenic Observatory, LSE
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Date
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Tuesday, 11 February 2014
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Abstract
The remarkable rise in unemployment in Greece has in a way overshadowed the substantial differentiation, across regions, in terms of regional unemployment and labour market adjustment. This paper examines the geography of these dynamics using probit regressions of unemployment risk and decomposing the observed regional unemployment differentials into three components corresponding to differences in labour quality, matching efficiency and effective demand. We find that, underlying the general increase in unemployment is a wealth of unemployment dynamics and adjustment trajectories. The fall in effective demand has been largest in the main metropolitan regions and the north and north-western periphery. Adjustment has been strong in some areas (e.g., Athens) but, overall, adjustment processes (such as bumping-down and changes in the mix of workforce characteristics) have been weak. The crisis has nullified the improvements in labour market performance registered since the country’s entry into the Eurozone, hitting especially those regions that benefitted most from the latter. The spatial differentiation of adjustment intensities and demand pressures suggests a heightened role for regional policy in the post-crisis period, especially in relation to addressing problems of over-education and matching efficiency in the demand-depressed areas and of inter-regional adjustment mechanisms nationally.
Photos
Dr Vassilis Monastiriotis (speaker) with Dr Bernard H. Casey (chair)
Dr Monastiriotis presenting his research