Crisis, adjustment and resilience in the Greek labor market: an unemployment decomposition approach

Vassilis Monastiriotis and Angelo Martelli

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The crisis in Greece led to one of the largest economic shocks in European history. Drawing on micro-data from the Greek Labour Force Survey, we utilize standard micro-econometric methods and non-linear decomposition techniques to measure the size of the shock exerted on the Greek regional and national labor markets and the compositional and price adjustments in response to this. We find elements of economic dynamism, with some sizeable price adjustments in the economy of the Greek capital, Athens; but overall our results show that compositional adjustments (in labor quality/characteristics) have been partial and limited, becoming stronger only in the more recent recovery. Our results suggest a significant metropolitan advantage with regard to economic resilience, coming predominantly from a more efficient functioning of the labor market in metropolitan areas vis-a-vis other regions. Our use of the decomposition techniques for the analysis of macro-level developments in the labor market offers a novel perspective to the application of the decomposition methodology.

Keywords: adjustment; Greek crisis; non-linear decomposition; shock; unemployment risk (search for similar items in EconPapers)
JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2021-01-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in International Regional Science Review, 1, January, 2021, 44(1), pp. 85 - 112. ISSN: 0160-0176

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