Measuring Institutional and Non-Institutional Aspects
of Labour Market Flexibility in Greece
This project begun in March 2008 and is supported by funding from the Greek Ministry of Economics and Finance. It is a two-legged project led by Professor Chris Pissaridis, Dr Vassilis Monastiriotis and Professor Kevin Featherstone. For the purposes of the project we were delighted to welcome Mr Achilleas Anagnostopoulos, a researcher from the Further Education Institute (TEI) of Larissa with an excellent knowledge and appreciation of the institutional framework of the Greek labour market.
Project description
The project has two, complementary components designed to provide a balanced set of research outputs on the flexibility of the contemporary Greek labour market.
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First section
The OECD has for many years collected time series data for economic aggregates and other institutional variables for its country members. The aggregates appear regularly in its publication Main Economic Indicators and the institutional variables in tables and long articles in Employment Outlook. For the last two decades the Centre for Economic Performance at the LSE has been making use of the OECD data base to put together comparable macroeconomic data for many industrial countries. The resulting data set is known as the OECD/CEP data set and has been extremely influential in empirical macroeconomic and labour economics research. For example, it provided the empirical basis for the book by Richard Layard, Stephen Nickell and Richard Jackman on Unemployment, and it has been used by Edmund Phelps in his book Structural Slumps and by many others in numerous influential articles, e.g., by Olivier Blanchard and Justin Wolfers (Economic Journal, 2000).
Data for Greece appear in many OECD publications, but despite earlier attempts it has not been possible to gather and harmonise enough of the Greek data to enable the inclusion of Greece in the cross-country data set. Currently the data set includes all major original members of the OECD except for Greece. This is a shortcoming of the data set -for example, many of the lessons about economic policy learned from the data set rely on the inclusion of countries that are at a comparable stage of development, such as Portugal and Spain. But it is also a shortcoming for observers of the Greek economy, who do not have easy access to internationally comparable Greek data to compare performance.
The project aims at compiling a comparable institutional and macroeconomic data set for the Greek economy, using both secondary statistical sources and primary data from interviews, in order to update with Greek data the CEP/OECD data set. A final report will describe the Greek findings and present statistical tabulations for Greece and a description of any findings from the primary data collection. Professor Christopher Pissarides, currently the Director of the Macroeconomic Research Programme at the CEP and the custodian of the CEP/OECD data set, supervises this part of the project.
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Second section
Complementing the above work, a parallel study seeks to develop non-institutional indicators of labour market flexibility to measure the extent and types of flexible labour use in Greece (rather than the regulatory and institutional framework, following the OECD methodology). This part of the project largely reproduce for Greece the Indexes of Labour Market Adaptability (ILMA) that are currently being developed for the UK under the auspices of the Department of Trade and Industry and HM Treasury. These indexes include measures of (i) wage flexibility, (ii) working time flexibility, and (iii) geographical/job mobility, i.e., cover aspects of the price mechanism, labour demand/utilisation, and labour supply, respectively.
Combining the two studies on the institutions (OECD) and flexible employment arrangements (ILMA) in the Greek labour market will allow us to make comparisons between the two types of measures. More importantly, it will allow us to understand better, through a more qualitative / analytical study, the bottlenecks and rigidities of the Greek labour market by identifying how the national institutional frameworks (captured by the OECD-like indexes) translate into specific flexible arrangements in Greece. Besides the general interest of the issue, this will have a direct implication in terms of helping identify areas of (de)regulation that policy should focus so as to enhance the actual levels of flexibility in the Greek labour market.
Thus, the overall project combines the 'institutional' and 'non-institutional' dimensions of the labour market and enables us to gain a more qualitative insight into the nature of its regulation in Greece.
The 'non-institutional' aspect of the research is led by Dr Vassilis Monastiriotis of the Hellenic Observatory, who has considerable experience in studying non-institutional aspects of labour market flexibility (and has the academic responsibility for the UK ILMA). This part of the project complements and expands relevant recent attempts in Greece to measure the extent of labour market flexibility, most notably the 2006 study by the Employment Observatory of the Greek Manpower Agency (OAED), with which close collaboration is being sought.
Project report
Through this project, the Hellenic Observatory was able to prepare a comparative evaluation of the recent proposals for labour market reform by the Koukiadis Committee. An interim report is due in the Michaelmas term of 2008. The final results of the project will be presented to the Ministry of Economy and Finance in the spring of 2009 and also will be announced in our website. Thus, please monitor this page for further information.