Unemployment and vocational training in the greek labour market:A three-level evaluation

The basic aim of this research is to study the impact that educational level and vocational training programmes (mainly funded by the European Community Support Frameworks) had on the labour market of semi-peripheral EU countries, using Greece as a case study. In particular, the paper focuses on the Greek regions of Attica and Central Macedonia, as well as Greece as a whole, during the period 1988-2000. It investigates econometrically whether the training courses in these two regions were compatible with the skill needs and thus, helped the trainees to increase their chances of finding a job, as well as to what extent there were skill mismatches between education-training programmes and the labour market. Attica and Central Macedonia were chosen because they are the largest regions in Greece in terms of population, and the two biggest urban centres in the country (Athens and Thessaloniki) are situated in the regions under study. So, in effect, the analysis investigates half of the Greek population and compares it econometrically with the rest of Greece. This investigation was undertaken using Labour Force Survey (LFS) micro-level data. As all training actions in the country are cofinanced by EU funds, the research also probes the outcomes of these funds during the period of the Community Support Framework - CSF-1 (1989-93) and CSF-2 (1994-99) in the domain of training. My analysis at the micro-level indicates that this training “revolution” was not accompanied by any real improvement in matching supply with demand or increasing people’s chances of finding a job. The study moves beyond the micro-level and embeds the empirical findings within the institutional/organizational environment of Greek vocational training (meso-level) and the broader political economy of Greece and its position in the EU political economy (macro-level) to provide a comprehensive explanation of what empirically is identified as the minimal impact of these policies. That is, the study goes further than the often narrow micro-economic explanations of the impact of training upon labour markets in that it explores the wider politico-economic context of these policies and assesses its impact on their effectiveness. Consequently, the findings are of relevance beyond the Greek case as they are also useful for comparative research pertaining to European regions or countries. Moreover, the study outcomes will be valuable to those who are interested in designing and implementing training programmes for structural change, as a number of key failings that have occurred in the Greek case are identified. The results of my research challenge the usefulness of the active labour market policies (ALMPs) alone. Training mechanisms, concrete political economy, inadequate public administration and the clientelistic system were the main obstacles to the matching process. This does not mean that training and ALMPs are not needed in Greece, but they can only function effectively in the presence of a suitable institutional framework, which has yet to become a reality.