Unemployment and Sectoral Competitiveness in Southern European Union Countries. Facts and Policy Implications

Abstract

This article addresses the problem of the main factors driving sectoral unemployment in the Mediterranean countries most affected by this phenomenon. The choice of the four countries (Greece, Italy, Spain and Portugal) relies on the fact that they are dealing with the highest unemployment rates in the European Union and a certain typology of the economic structure. The originality of our research is offered by its direction, less tackled until now, namely the focus on the particularities of the economic sectors, trying to capture differences between them. The importance and the impact of the results are supported by the methods used to produce them, indicators and econometric models that are on trend and bring extra information to available studies. Descriptive statistics and mismatch indexes are used to outline the economic and labour market structure, while the econometric models built on panel data capture the impact of factors such as GVA growth, specialization and labour market mismatches on the unemployment rate at six economic sectors level. Our paper makes three contributions to the literature. First, we have demonstrated that agriculture is the sector of activity less sensitive to output fluctuations in terms of unemployment and can become a buffer for the jobless in times of recessions. Second, we have proved that industry, as a whole, is highly responsive to economic developments and bad specialization could worsen unemployment situation in this sector. Third, we showed that educational mismatches have a significant impact on unemployment in those sectors of activity that employ low educated workforce.

Digital divide, skills and perceptions on digitalisation in the European Union—Towards a smart labour market

“…Thus, the attitude towards digitalisation is quite a controversial one, and public and private policies should take into account both citizens' concerns and the existence of some groups more vulnerable than others in terms of the access on the labour market. In the digitalisation era and in a period of deep demographic transformations, like ageing, everyone should take better care of what we call 'human capital' (providing high-quality education for the young generation and lifelong learning opportunities for older generations) [50].…”

Okun’s law in an emerging country: An empirical analysis in Indonesia

“…The labor needs that occurred due to an increase in the GDP could not be met by the vocational-education level group. This indicates a miss-match skill from this group (Alamro & Al-dala'ien, 2016;Dimian et al, 2018). Thus, it can be understood the group of workers originating from the vocational-education level group was not yet in accordance with the needs of the labor market.…”

“…It means the increase in the GDP was not caused by the increase in the workforce from these groups. When they left the labor market, they were replaced by other education groups (Dimian et al, 2018;Zanin, 2016). Thus, it can be understood an increase in the GDP did not require a workforce from nonschool groups.…”

“…In the Mediterranean countries, Dimian et al (2018) used the Panel Data revealed that agriculture was the less-sensitive sector of activity to the output fluctuations in terms of unemployment and could be a buffer for the unemployed during the recessions. The industry was highly responsive to economic developments and bad specialization could worsen the unemployment situation.…”

“…Job creation, as a result of economic growth, should absorb the workforce, reduce the number of unemployed people and the unemployment rate (Sasongko, Huruta, & Pirzada, 2019;Sasongko, Huruta, & Gultom, 2019;Appiah, Li, Frowne, & Donkor, 2019). Moreover, the Okun's Law can be used to see the relationship between the economic growth and unemployment more deeply which was by looking at the impact on sub-populations and the economic sub-sector (Boďa & Považanová, 2015;Dimian, Aceleanu, Ileanu, & Șerban, 2018;Dixon et al, 2016;Melguizo, 2016;Zanin, 2014Zanin, , 2016. Thus, it can be understood previous researches still show various results of the relationship between unemployment and output.…”