Unemployment in Greece: evidence from Greek regions

28 Pages Posted: 28 Jul 2022

Date Written: June 1, 2012

Abstract

The purpose of the paper is to examine the nature of Greek unemployment allowing for cross-sectional dependence among Greek regions and for the presence of structural breaks. The paper contributes to the literature assessing the stochastic properties of Greek regional unemployment rates using recently developed and more powerful panel unitroot tests, such as the Lagrange Multiplier (LM) panel unit root test of Im et al. (2010), that allow for level and trend breaks, heterogeneity and cross-sectional dependence in the panel. The results show that in all cases, after taking into account the fact that regional unemployment rates in Greece are subject to a structural break both in mean and the slope of the series, the null hypothesis of a unit root is not rejected, indicating that the Greek regional unemployment series are non-stationary with the presence of a structural break.

Keywords: Unemployment, Hysteresis, Panel unit root tests, Structural breaks, Cross-section dependence

JEL Classification: C32, C33, E24, J64, R23

Suggested Citation

Bakas, Dimitrios, Unemployment in Greece: evidence from Greek regions (June 1, 2012). Bank of Greece Working Paper No. 146, Available at SSRN: https://ssrn.com/abstract=4173033 or http://dx.doi.org/10.2139/ssrn.4173033

Dimitrios Bakas (Contact Author)

Nottingham Trent University ( email )

Burton Street
NG1 4BU Nottingham
United Kingdom

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