Long-term Unemployment in Greece: developments, incidence and composition

Abstract

The duration of unemployment spells in Greece is investigated by looking at developments over time and by estimating duration models for unemployed men using data from the 2005 Greek Labour Force Survey (LFS). The prolongation of spells since the 1990s reflects the rise in the overall unemployment rate and the increased probability of transition from short-term to long-term unemployment. The limited number of new jobs, due inter alia to the stringent regulatory environment in product and labour markets, might be contributing to the differences in the percentage of long-term unemployment between Greece and the EU-15. Estimates of duration models suggest that older individuals with no previous work experience, in high-unemployment regions are more likely to experience longer unemployment spells while education appears to differentiate the length of spells amongst younger individuals. There is some tentative evidence of positive duration dependence in the first few months of the spell, which, however, turns negative as the spell continues.

Keywords: unemployment, long-term unemployment, duration models

JEL Classification: J64, C41