Facultad de Económicas y CC Empresariales

Unemployment is one of the main problems facing today's economies. In the context of the European Union, it is the Mediterranean economies that have traditionally shown a less favorable evolution of unemployment. This paper presents an explanatory model of the evolution of unemployment in two of these Mediterranean economies, Greece, and Spain, since the launching of the European Monetary Union. These were two of the European economies hardest hit by the Great Recession of 2008 and subsequently by the pandemic in 2020, so it is interesting to study which economic factors would explain the evolution of their unemployment rates. For this purpose, economic variables such as GDP pc, the output gap, investment, deficit, the employment rate by educational levels, inflation, labour productivity, labour force and public spending as a percentage of GDP. On the other hand, it is interesting to note to what extent Greece and Spain have or have not shown similar patterns of behavior of their labour markets so far this century, and what kind of economic policy measures could be put in place to ensure that both countries cease to have one of the highest unemployment rates in the EU. Finally, it will be analyzed how they have been affected by the Great Recession and the covid health crisis.

One of the main concerns facing societies today is unemployment, although its evolution is not the same in all economies. Moreover, it is one of the variables that can not only delay but also prevent real convergence between the Member States of the European Union. This is the reason why it is necessary to know the determinants of the evolution of the unemployment rate. The aim of this paper is to present an explanatory model of unemployment since the beginning of the 21st century in two Mediterranean economies, Greece and Cyprus, which have important historical, cultural and economic ties. The identification of variables that may influence unemployment makes it possible to determine wheth er the response of the Greek and Cypriot authorities to reduce it has been adequate.