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After Austerity: Measuring the Impact of a Job Guarantee Policy for Greece

Author

Listed:
  • Rania Antonopoulos
  • Sofia Adam
  • Kijong Kim
  • Thomas Masterson
  • Dimitri B. Papadimitriou
Abstract
To mobilize Greece's severely underemployed labor potential and confront the social and economic dangers of persistent unemployment, we propose the immediate implementation of a direct public benefit job creation program--a Greek "New Deal." The Job Guarantee (JG) program would offer the unemployed jobs, at a minimum wage, on work projects providing public goods and services. This policy would have substantial positive economic impacts in terms of output and employment, and when newly accrued tax revenue is taken into account, which substantially reduces the net cost of the program, it makes for a comparatively modest fiscal stimulus. At a net cost of roughly 1 percent to 1.2 percent of GDP (depending on the wage level offered), a midrange JG program featuring the direct creation of 300,000 jobs has the potential to reduce the unemployed population by a third or more, once indirect employment effects are taken into account. And our research indicates that the policy would do all this while reducing Greece’s debt-to-GDP ratio--which leaves little room for excuses.

Suggested Citation

  • Rania Antonopoulos & Sofia Adam & Kijong Kim & Thomas Masterson & Dimitri B. Papadimitriou, 2014. "After Austerity: Measuring the Impact of a Job Guarantee Policy for Greece," Economics Public Policy Brief Archive ppb_138, Levy Economics Institute.
    • Handle: RePEc:lev:levppb:ppb_138
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    References listed on IDEAS

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    1. Dedoussopoulos, Apostolos. & Aranitou, Valia. & Koutentakis, Franciscos. & Maropoulou, Marina., 2013. "Assessing the impact of the memoranda on Greek labour market and labour relations," ILO Working Papers 994837743402676, International Labour Organization.
    2. repec:ilo:ilowps:483774 is not listed on IDEAS
    3. William F. Mitchell, 1998. "The Buffer Stock Employment Model and the NAIRU: The Path to Full Employment," Journal of Economic Issues, Taylor & Francis Journals, vol. 32(2), pages 547-555, June.
    4. Dimitri B. Papadimitriou & Michalis Nikiforos & Gennaro Zezza, 2014. "Prospects and Policies for the Greek Economy," Economics Strategic Analysis Archive sa_feb_14, Levy Economics Institute.
    5. Dimitri B. Papadimitriou, 1998. "(Full) Employment Policy: Theory and Practice," Economics Working Paper Archive wp_258, Levy Economics Institute.
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    Cited by:

    1. Ernst, Ekkehard & Merola, Rossana & Reljic, Jelena, 2024. "Fiscal policy instruments for inclusive labour markets: A review," GLO Discussion Paper Series 1406, Global Labor Organization (GLO).
    2. Dimitri B. Papadimitriou & Michalis Nikiforos & Gennaro Zezza, 2014. "Is Greece Heading For a Recovery?," Economics Strategic Analysis Archive sa_dec_14, Levy Economics Institute.

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