The origin and the impact of labour market institutions in Greece

Light lunch provided

Labour markets are not frictionless. Dealing with these frictions, calls for the establishment of institutions to protect employees from inter alia extreme income volatility. The Greek labour market was characterized by a combination of high employment protection and limited benefits of the unemployed. Institutions to deal with the shortcomings of the labour market were adopted in Greece a very long time ago. This presentation looks at the political economy considerations that led to the adoption of the specific labour market institutions, discusses whether these were appropriate at the time they were instated and at the eve of the 21st century. The presentation argues that these institutions contributed to the loss of competitiveness of the Greek economy that led up to the crisis without protecting those more in need.