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Beyond Rising Unemployment: Unemployment Risk, Crisis and Regional Adjustments in Greece

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  • Vassilis Monastiriotis
  • Angelo Martelli
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.

Suggested Citation

  • Vassilis Monastiriotis & Angelo Martelli, 2013. "Beyond Rising Unemployment: Unemployment Risk, Crisis and Regional Adjustments in Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 80, Hellenic Observatory, LSE.
    • Handle: RePEc:hel:greese:80
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    Cited by:

    1. Monastiriotis, Vassilis & Martelli, Angelo, 2021. "Crisis, adjustment and resilience in the Greek labor market: an unemployment decomposition approach," LSE Research Online Documents on Economics 107048, London School of Economics and Political Science, LSE Library.
    2. Marilena Simiti, 2014. "Rage and Protest: The case of the Greek Indignant movement," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 82, Hellenic Observatory, LSE.
    3. Athanasia Chalari & Clive Sealey & Mike Webb, 2016. "A Comparison of Subjective Experiences and Responses to Austerity of UK and Greek Youth," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 102, Hellenic Observatory, LSE.
    4. Rebekka Christopoulou & Vassilis Monastiriotis, 2016. "Public-private wage duality during the Greek crisis," Oxford Economic Papers, Oxford University Press, vol. 68(1), pages 174-196.
    5. Yannis Tsirbas & Dimitri Sotiropoulos, 2015. "What Greek political elites think about Europe and the crisis? An exploratory analysis," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 93, Hellenic Observatory, LSE.
    6. Vassilis Monastiriotis & Angelo Martelli, 2021. "Crisis, Adjustment and Resilience in the Greek Labor Market: An Unemployment Decomposition Approach," International Regional Science Review, , vol. 44(1), pages 85-112, January.
    7. Nick Papandreou, 2014. "Life in the First Person and the Art of Political Storytelling:The Rhetoric of Andreas Papandreou," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 85, Hellenic Observatory, LSE.
    8. Platon Monokroussos & Dimitrios Thomakos & Thomas A. Alexopoulos & Eleni Lydia Tsioli, 2017. "The Determinants of Loan Loss Provisions: An Analysis of the Greek Banking System in Light of the Sovereign Debt Crisis," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Platon Monokroussos & Christos Gortsos (ed.), Non-Performing Loans and Resolving Private Sector Insolvency, chapter 9, pages 181-225, Palgrave Macmillan.
    9. Christodoulakis, Nicos, 2014. "The conflict trap in the Greek Civil War 1946-1949: an economic approach," LSE Research Online Documents on Economics 56228, London School of Economics and Political Science, LSE Library.
    10. Konstantinos Kougias, 2017. "‘Real’ Flexicurity Worlds in action: Evidence from Denmark and Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 106, Hellenic Observatory, LSE.
    11. Vassilis Arapoglou, Kostas Gounis, 2015. "Poverty and Homelessness in Athens: Governance and the Rise of an Emergency Model of Social Crisis Management," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 90, Hellenic Observatory, LSE.
    12. William Gbohoui, 2019. "Structural Unemployment in Luxembourg: Bad Luck or Rational Choice?," IMF Working Papers 2019/243, International Monetary Fund.
    13. Jordaan, Jacob A. & Monastiriotis, Vassilis, 2016. "The domestic productivity effects of FDI in Greece: loca(lisa)tion matters!," LSE Research Online Documents on Economics 68816, London School of Economics and Political Science, LSE Library.
    14. Stavros B. Thomadakis, 2015. "Growth, Debt and Sovereignty: Prolegomena to the Greek Crisis," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 91, Hellenic Observatory, LSE.
    15. Tyralis, Hristos & Mamassis, Nikos & Photis, Yorgos N., 2017. "Spatial analysis of the electrical energy demand in Greece," Energy Policy, Elsevier, vol. 102(C), pages 340-352.
    16. Rosa VAsilaki, 2016. "Policing the crisis in Greece: The others' side of the story," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 98, Hellenic Observatory, LSE.
    17. Chalari, Athanasia & Sealey, Clive & Webb, Mike, 2016. "A comparison of subjective experiencesand responses to austerity of UK andGreek youth," LSE Research Online Documents on Economics 68585, London School of Economics and Political Science, LSE Library.
    18. Kougias, Konstantinos, 2017. "‘Real’ flexicurity worlds in action: evidence from Denmark and Greece," LSE Research Online Documents on Economics 69576, London School of Economics and Political Science, LSE Library.
    19. Konstantinos Gourzis & Stelios Gialis, 2019. "Dismantled Spatial Fixes in the Aftermath of Recession: Capital Switching and Labour Underutilization in the Greek Capital Metropolitan Region," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 43(4), pages 741-759, July.
    20. Stavros Thomadakis, Dimitrios Gounopoulos, Christos Nounis and Michalis Riginos, 2014. "Financial Innovation and Growth: Listings and IPOs from 1880 to World War II in the Athens Stock Exchange," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 86, Hellenic Observatory, LSE.
    21. Monastiriotis, Vassilis & Martelli, Angelo, 2021. "Crisis, adjustment and resilience in the Greek labor market: an unemployment decomposition approach," LSE Research Online Documents on Economics 115066, London School of Economics and Political Science, LSE Library.

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