The Ins and Outs of Unemployment in the Current Greek Economic Crisis

We are investigating unemployment inflows and outflows using micro-data from the Greek Labour Force Survey (1998-2013). Focusing on the post-2008 recessionary period, aggregate unemployment decompositions show that both inflow and outflow rates affect unemployment fluctuations. In particular, early on in the recession period, inflow rates dominates, while later outflow rates take over. These findings remain unaltered when unemployment persistence and low transition rates are taken into account. Furthermore, by applying multinomial regression techniques, we find that the ins and outs of unemployment vary with individual-specific heterogeneity (gender, age, education, etc.). This heterogeneity, however, exhibits a differentiated impact in the pre- and post-2008 periods. Overall, designing an effective employment policy in Greece needs to take into consideration the exceptionally low job finding rate (10%) and employment composition in the ongoing labour market crisis.