Economic Survey of Greece 2005: Raising labour force participation and employment rates

 

The following OECD assessment and recommendations summarise Chapter 4 of the  Economic Survey of Greece 2005 published on 7 July 2005.

Employment creation requires addressing the remaining structural rigidities

The Greek labour market is still characterised by high unemployment, particularly among young people and women, and long-term unemployment still accounts for more than 55% of the total. Policy changes in 2001 attempted to make regulations on employment protection legislation, overtime and part-time work more flexible, but their impact on employment promotion appears to have been limited so far. A new package of labour market reforms was introduced in 2004, which included: the reduction of non-wage costs for unemployed women with children; the conversion of unemployment benefits to employment subsidies for registered unemployed; the creation of part-time jobs in the public sector to offer social services; and increasing the rent subsidy for unemployed persons finding work away from their home town. While these initiatives should have a positive impact on employment, further reforms will be necessary and should aim at: making more effective the possibility of opting out of sectoral or occupational collective bargaining agreements in areas of high unemployment; reducing non-wage labour costs, especially for minimum wage earners; ensuring no discrimination against part-time employment; reforming employment protection legislation further, in order to reduce uncertainty in hiring and firing decisions; eliminating impediments to labour mobility, for example through a reduction in property transfer taxes; and improving the job-matching efficiency of the public employment service. The social partners should be encouraged to increase employment of lower-skilled workers, by allowing the gap between minimum and average wage levels to widen in future wage negotiations.

Skill mismatches need to be corrected

Though the level of educational attainment has improved considerably over the past 25 years, the stock of human capital in Greece is below the OECD average, and adapting the educational system better to the labour market needs is in any case indispensable for achieving improved labour market performance. For example, the transition of young people from initial education to working life in Greece remains very slow by international standards. General education should provide flexibility in the acquisition of new skills, and employers' representatives should be consulted in the design of training programmes so that they do in fact lead to skills demanded in the labour market. Reforms to the educational system also need to raise the share of students completing upper secondary education. Recent policy initiatives attempt to improve the link between education, initial vocational and continuing training, and labour market needs. They also aim at improving the quality of education through the commencement of teacher training programmes, the introduction of advanced technology in schools combating "digital illiteracy", and an increase in the number of faculties in secondary and tertiary education. While these initiatives are commendable, concrete objectives should be set for their effective implementation.

Education indicators in comparison
 

1. Unweighted average.
Source: OECD, Education at a Glance (2004).

Return to the Economic Survey of Greece 2005 homepage

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A printer-friendly Policy Brief (pdf format) can also be downloaded. It contains the OECD assessment and recommendations, but not all of the charts included on the above pages.

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For further information please contact the Greece Desk of the OECD Economics Department at webmaster@oecd.org.

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