The Different Paths of Greece and Spain to High Unemployment | The Big Picture

In 2007, Spain and Greece had lower unemployment rates than the euro area as a whole.

In their article, Thomas Klitgaard and Ayşegül Şahin “show that while the unemployment rates in the two countries are similar today, the paths have been very different.” (Choosen excerpts by Job Market Monitor to follow)

The employment decline in Greece, like in the euro area, has been proportional to the country’s steep decline in GDP; Spain’s employment has fallen much more than output, due in part to its notable labor market flexibility.

A look at total employment for Greece and Spain in the chart below shows the large percentage declines in the two countries since 2007. Job losses started earlier in Spain, with the collapse of a housing bubble, while Greece managed to keep employment levels stable, in line with the euro area as a whole, before its sovereign debt crisis caused very steep declines in employment beginning in 2010. In both countries, employment in 2012 is down roughly 15 percent from 2007 levels.

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via The Different Paths of Greece and Spain to High Unemployment | The Big Picture.