The short-term impact of the 2020 pandemic lockdown on employment in Greece

Gordon Betcherman; Nicholas Giannakopoulos; Ioannis Laliotis; Ioanna Pantelaiou; Mauro Testaverde; Giannis Tzimas

doi:10.1007/s00181-023-02381-2

The short-term impact of the 2020 pandemic lockdown on employment in Greece

Empir Econ. 2023 Feb 16:1-35. doi: 10.1007/s00181-023-02381-2. Online ahead of print.

Authors

Gordon Betcherman¹, Nicholas Giannakopoulos², Ioannis Laliotis^{3

4}, Ioanna Pantelaiou^{5

6}, Mauro Testaverde⁶, Giannis Tzimas³

Affiliations

¹ School of International Development and Global Studies, University of Ottawa, IZA, Ottawa, Canada.
² Department of Economics, University of Patras, Patras, Greece.
³ University of Peloponnese, Peloponnese, Greece.
⁴ Global Labor Organization, City University of London, London, UK.
⁵ Athens University of Economics and Business, Athens, Greece.
⁶ World Bank, Washington, D.C., USA.

Abstract

This paper analyzes the short-term employment impact of the COVID-19 lockdown in Greece during the first few months following the pandemic onset. During the initial lockdown period, aggregate employment was lower by almost 9 percentage points than it would have been expected based on pre-pandemic employment trends. However, due to a government intervention that prohibited layoffs, this was not due to higher separation rates. The overall short-term employment impact was due to lower hiring rates. To uncover the mechanism behind this, we use a difference-in-differences framework, and show that tourism-related activities, which are exposed to seasonal variation, had significantly lower employment entry rates in the months following the pandemic onset compared to non-tourism activities. Our results highlight the relevance of the timing of unanticipated shocks in economies with strong seasonal patterns, and the relative effectiveness of policy interventions to partly absorb the consequences of such shocks.

Keywords: COVID-19; Employment; Greece; Job hiring; Job separation.