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Beyond rising unemployment: unemployment risk, crisis and regional adjustments in Greece

Monastiriotis, Vassilis and Martelli, Angelo (2013) Beyond rising unemployment: unemployment risk, crisis and regional adjustments in Greece. GreeSE: Hellenic Observatory papers on Greece and Southeast Europe, 80. Hellenic Observatory, London School of Economics and Political Science, London, UK.

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Abstract

The remarkable rise in unemployment in Greece has in a way overshadowed the substantial differentiation, across regions, in terms of regional unemployment and labour market adjustment. This paper examines the geography of these dynamics using probit regressions of unemployment risk and decomposing the observed regional unemployment differentials into three components corresponding to differences in labour quality, matching efficiency and effective demand. We find that, underlying the general increase in unemployment is a wealth of unemployment dynamics and adjustment trajectories. The fall in effective demand has been largest in the main metropolitan regions and the north and north-western periphery. Adjustment has been strong in some areas (e.g., Athens) but, overall, adjustment processes (such as bumping-down and changes in the mix of workforce characteristics) have been weak. The crisis has nullified the improvements in labour market performance registered since the country’s entry into the Eurozone, hitting especially those regions that benefitted most from the latter. The spatial differentiation of adjustment intensities and demand pressures suggests a heightened role for regional policy in the post-crisis period, especially in relation to addressing problems of over-education and matching efficiency in the demand-depressed areas and of inter-regional adjustment mechanisms nationally.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.lse.ac.uk/europeanInstitute/research/he...
Additional Information: © 2013 The Authors
Library of Congress subject classification: J Political Science > JA Political science (General)
J Political Science > JN Political institutions (Europe)
Sets: Departments > European Institute
Research centres and groups > Spatial Economics Research Centre
Research centres and groups > Hellenic Observatory
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 80
Date Deposited: 14 Jan 2014 11:20
URL: http://eprints.lse.ac.uk/55265/

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