Labour Market Performance and Institutions in Greece

The Greek unemployment rate rose from 2 per cent in the 1960s to 9–10 per cent in the 1990s. This reflected the increase in female participation rates, the slowdown in growth, the restructuring of production, and the increased mismatch between jobs and job seekers, but the most crucial factor was the persistence of real wage aspirations. In this paper, we examine the characteristics and trends of unemployment in Greece and make comparisons with other countries. In addition to a number of standard explanations we emphasize the role of labour market institutions and public sector hiring policy as two factors contributing to the rise in unemployment in Greece.