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Employment and unemployment duration in less developed regions


  • Ioannis Theodossiou
  • Grigoris Zarotiadis


Purpose - The purpose of this paper is to examine the distribution of labor market experience among the unemployed in a less developed area in Greece (the north-western region of Epirus), where unemployment has severe detrimental repercussions on the local workforce. Design/methodology/approach - The paper uses a dataset, obtained through purpose built questionnaires used to assist the local authority in carrying out a regional, pilot, active labor market policy project financed by the European Commission and the Greek Government. Findings - An ordinary least square regression was applied correcting for incidental truncation, in order to show that the duration of the prior unemployment spell negatively affects the duration of the current employment spell and vice versa, which highlights the phenomenon of an “unemployment trap”. Furthermore, those personal and socioeconomic characteristics which are responsible for causing jobless individuals to be “trapped” in the unemployment state are identified. Workers aged above 45, women, employees in sales and other service occupations, face significantly shorter complete spells of employment, along with longer duration of unemployment, hence suffering from self-reinforcing unemployment. Originality/value - The results show that a “scarring effect” appears to be in operation, as the duration of prior unemployment spell has deleterious effects on the duration of the subsequent employment and vice versa. This evidence provides additional insights for policymakers, who design measures for individuals vulnerable to unemployment in the less developed regions of the European Union.

Suggested Citation

  • Ioannis Theodossiou & Grigoris Zarotiadis, 2010. "Employment and unemployment duration in less developed regions," Journal of Economic Studies, Emerald Group Publishing, vol. 37(5), pages 505-524, September.
  • Handle: RePEc:eme:jespps:v:37:y:2010:i:5:p:505-524

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    References listed on IDEAS

    1. Konstantin Gluschenko, 2004. "Analysing changes in market integration through a cross-sectional test for the law of one price," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 135-149.
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    5. Berkowitz, Daniel & DeJong, David N., 2003. "Regional integration: an empirical assessment of Russia," Journal of Urban Economics, Elsevier, vol. 53(3), pages 541-559, May.
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    8. David Parsley Shang-Jin Wei, 2002. "Currency Arrangements And Goods Market Integration: A Price Based Approach," International Finance 0211004, EconWPA.
    9. Konstantin Gluschenko, 2003. "Market integration in Russia during the transformation years," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(3), pages 411-434, September.
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    Employment; Unemployment; Labour market; Europe; Greece;


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