Introduction

In the attached article in the references, it is shown that Greece has succumbed to a low employment rate since the financial crisis that has affected them in 2007. It is reported that Greece has reached an all-time high unemployment rate of 28% in November 2013 and has not been improving as of late till the point in which the article was written in February 2014. The article also states the contrast of Greece’s unemployment rate to the average rate of unemployment in the euro-zone, which is more than double in percentile. In this assignment, I will be discussing the unemployment issues that currently impact Greece.

Economic Concepts Identified

Factors affecting unemployment in Greece will be discussed. The precise economic definition of unemployment consists of unemployment falling into one or more of these factors, without work even after actively searching for a job for four weeks, waiting to be called back to a job in which he or she has been laid off, or waiting to start a new job within 30 days.

Firstly, we will look at the GDP rates of Greece. By identifying the historical and current GDP rates of Greece, we would be able to identify an inflationary (GDP increases) or a recessionary (GDP decreases over two quarters) economy. Using this information, it will explain certain levels of unemployment in Greece depending if it’s a recessionary or inflationary economy. Recessionary economy generally has a higher unemployment rate due to less resources being used, and inflationary would be vice-versa.

Secondly, a few different unemployment rates will be used to provide further statistical analysis of unemployment in Greece. There are three rates that will be used the unemployment rate in general (percentage of labour force that is unemployed) , the long-term unemployment rate (unemployed people who have been unemployed more than 27 weeks), and the youth unemployment rate (unemployed people who are between 16-25 years old).

Thirdly, the different types of unemployment will be explained and their subsequent effects on Greece. There are generally three types of unemployment, frictional, structural, and cyclical. Frictional unemployment stems upon the normal labour market turnover. Structural unemployment is unemployment due to changes in technology and the increase in foreign competitors which may affect the skills required and/or a change in location. Cyclical unemployment is unemployment that occurs during a recession.

Lastly, we will be looking at the policies implemented by the government of Greece to curb this problem of unemployment.

Application of Economic Concepts