The Greek Labour Market During the Crisis: Unemployment, Employment and Labour Force Participation

19 Pages Posted: 27 Jul 2022

See all articles by Evangelia Papapetrou

Evangelia Papapetrou

Bank of Greece; National and Kapodistrian University of Athens

Dimitrios Bakas

Nottingham Trent University

Date Written: November 1, 2013

Abstract

The aim of the study is to explore developments in key labour market aggregates, such as the unemployment rate, the participation rate and the employment rate, and to highlight the fact that in the current environment of deep and protracted economic downturn, these developments varied significantly compared with the period before the crisis. The empirical analysis, employing a two-regime threshold cointegration model, shows that the labor force participation rate has increased throughout the period from 1990 onwards, reflecting the long-term trend for increasing female employment. However, prior to 2010, this upward trend is found to be independent of the level of the unemployment rate. Conversely, after the period of Greece's entry into the Memorandum of Understanding (MoU), the participation rate appears to be associated with a particularly high level of unemployment rate that characterizes this period, while accompanied by a sharp fall in the employment rate. It is concluded that the recent high level of unemployment does not discourage potential workers from seeking employment. It appears, however, that new entrants have low employment chances.

Keywords: Labour force participation, Employment, Unemployment, Threshold cointegration, Non-linearity, Non-stationarity

JEL Classification: J21, J64, C32

Suggested Citation

Papapetrou, Evangelia and Bakas, Dimitrios, The Greek Labour Market During the Crisis: Unemployment, Employment and Labour Force Participation (November 1, 2013). Bank of Greece Economic Bulletin, Issue 38, Article 4, Available at SSRN: https://ssrn.com/abstract=4167869

Evangelia Papapetrou (Contact Author)

Bank of Greece ( email )

21 E. Venizelos Avenue
GR 102 50 Athens
Greece

National and Kapodistrian University of Athens ( email )

1 Sofokleous Str
Athens, 10559
Greece

Dimitrios Bakas

Nottingham Trent University ( email )

Burton Street
NG1 4BU Nottingham
United Kingdom

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