Blog Post

Is Greece’s labour market bouncing back?

After rapid increases in unemployment and large wage reductions, Greece’s labour market is showing signs of recovery. Certain sectors of the economy are showing strong employment growth, which could hint at a broader economic recovery.

By: Date: June 14, 2017 Topic: Macroeconomic policy

The Greek economy has suffered greatly since the 2008 crisis, but one bright spot in the Greek economy is the rebound of the labour market. This resurgence is touching many sectors.

Although employment in Greece shrunk by an astonishing 19 percent from late 2008 to early 2014,  employment figures now show signs of recovery.

Figure 1 below shows the number of persons employed relative to the first quarter of 2014. Employment started to expand in 2014, with a short-lived setback in the first quarter of 2015, when the Syriza government came to power and discussions with official creditors stalled. However, since the second quarter of 2015, employment has been expanding again in many sectors of the economy.

The largest sector – trade, transport and tourism – recorded 7.5% more employees in the first quarter of 2017 than three years earlier. This is a remarkably positive development. Industry, professional services, and information and communication services also recorded substantial job gains.

Therefore, the rebound is especially strong in the so-called tradeable sector, which brings revenues to Greece from abroad. This is especially important, given that Greece has a large external debt, because a strong performance of the tradeable sector would help to reduce this debt.

Employment is also expanding in the public sector, despite all the talks of massive layoffs.

The sectors with the weakest job records are financial and insurance activities (most likely due to the inevitable restructuring of the banking sector) and agriculture.

And what about wages? The pre-crisis wage growth continued till early 2010, after which hourly wages fell by 24% (in nominal terms) till mid-2015, an extraordinarily large fall. However, as Figure 2 indicates, since the third quarter of 2015 hourly wages are increasing in most sectors (note that quarterly data is somewhat volatile).

Certainly, after a dramatic collapse, the Greek labour market shows clear signs of a broad-based recovery. This might signal some improved business optimism and might be followed by a stronger economic recovery too. Such an expectation is supported by the changes in the Greek economy towards a new growth model, as I argued two years ago here.

How can Greece’s partners support these positive developments? Well, clarity about Greek public debt (a topic to be discussed by the Eurogroup on Thursday) and the possible inclusion of Greek bonds in the ECB’s asset purchase programme would promote positive sentiment. Doing so could help unleash growth in Greece, furthering these welcome trends in the labour market.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read article More by this author
 

Blog Post

Inclusive growth

An inclusive European Union must boost gig workers’ rights

A European initiative strengthening rights for gig workers is welcome. A digitised economy should also be inclusive.

By: Mario Mariniello Topic: Digital economy and innovation, Inclusive growth Date: December 7, 2021
Read article
 

Blog Post

Inclusive growth

The triple constraint on artificial-intelligence advancement in Europe

Skills, data and financing shortcomings constrain artificial-intelligence innovation in Europe.

By: Mia Hoffmann and Laura Nurski Topic: Digital economy and innovation, Inclusive growth Date: December 6, 2021
Read article More by this author
 

Podcast

Podcast

Technology: a product of unequal power?

The effects of digital technology on work and wages.

By: The Sound of Economics Topic: Digital economy and innovation, Inclusive growth Date: November 24, 2021
Read about event More on this topic
 

Past Event

Past Event

Phasing out COVID-19 emergency support programmes: effects on productivity and financial stability

How can European countries phase out the COVID-19 support measures without having a negative impact on productivity and financial stability?

Speakers: Eric Bartelsman, Maria Demertzis, Peter Grasmann and Laurie Mayers Topic: Macroeconomic policy Date: November 9, 2021
Read article
 

Blog Post

Inclusive growth

Concentration of artificial intelligence and other frontier IT skills

Online job postings indicate that demand from top tech firms for frontier IT skills is about double their demand for other IT skills. This could indicate increasing concentration of skills in a few firms, with other firms left behind.

By: Wang Jin, Georgios Petropoulos and Sebastian Steffen Topic: Digital economy and innovation, Inclusive growth Date: October 21, 2021
Read article More by this author
 

Blog Post

Inclusive growth

Making antitrust work for, not against, gig workers and the self-employed

Policymakers should act to deal with labour-market concentration trends that potentially harm workers, especially gig workers and the self-employed.

By: Georgios Petropoulos Topic: Digital economy and innovation, Inclusive growth Date: October 11, 2021
Read article
 

Blog Post

Inclusive growth

Remote work, EU labour markets and wage inequality

More remote working in the wake of the pandemic could exacerbate wage inequality, with young workers, women and the low educated potentially losing out.

By: Georgios Petropoulos and Tom Schraepen Topic: Digital economy and innovation, Inclusive growth Date: September 14, 2021
Read article More by this author
 

Blog Post

Inclusive growth

Designing a hybrid work organisation

Post-pandemic hybrid work models should be carefully planned, taking into account individual and organisational needs.

By: Laura Nurski Topic: Digital economy and innovation, Inclusive growth Date: July 5, 2021
Read article More by this author
 

Podcast

Podcast

The skills of the future

What challenges and opportunities does technology bring to the labour market?

By: The Sound of Economics Topic: Digital economy and innovation, Inclusive growth Date: June 23, 2021
Read article More by this author
 

Blog Post

Inclusive growth

Algorithmic management is the past, not the future of work

Algorithmic management is the twenty-first century’s scientific management. Job quality measures should be included explicitly in health and safety risk assessments for workplace artificial-intelligence systems.

By: Laura Nurski Topic: Digital economy and innovation, Inclusive growth Date: May 6, 2021
Read article More on this topic
 

External Publication

Wealth distribution and social mobility

This report explores the distribution of household wealth in the EU Member States and analyses the role of wealth in social mobility.

By: Zsolt Darvas and Catarina Midões Topic: Macroeconomic policy Date: April 1, 2021
Read article Download PDF More by this author
 

Working Paper

The unequal inequality impact of the COVID-19 pandemic

Less-educated workers have suffered most from job losses in the COVID-19 pandemic, and it is quite likely there was a significant increase in European Union income inequality in 2020.

By: Zsolt Darvas Topic: Global economy and trade, Macroeconomic policy Date: March 30, 2021
Load more posts