Regional Decoupling and Within-Sector Productivity Collapse in a Coal Phase-Out Region: Panel Evidence from Western Macedonia, Greece

The decarbonization of electricity generation transfers a system-level transformation onto a few regions whose productive structure was built around fossil generation. Such regions are expected to adjust through job losses and the reallocation of labor, yet the macroeconomic anatomy of that adjustment is rarely measured. This study examines Western Macedonia, the core lignite territory of Greece, using a panel of 13 Greek NUTS-2 regions from 2000 to 2024 with regional sectoral accounts, employment, household income, and population series. A two-way fixed-effects panel design with an event study, convergence tests, and a McMillan–Rodrik decomposition measures the regional trajectory and the sources of its productivity change. Per-capita output falls about 11% below the path implied by common year effects from 2019, although randomization inference does not attain conventional significance. Industrial gross value added contracts by 62.6%, while industrial headcount rises by 7.6%. Labor productivity falls 31.2% in nominal and 48.5% in real terms, almost entirely within sectors. Adjustment, therefore, operated through productivity, household income, and out-migration rather than headcount employment. The case shows how the recomposition of an energy system reaches regional output, productivity, and demography, and why transition policy judged on job retention alone may misread it.