When Labour Market Reforms actually Reduce Unemployment - Prof Pierre Cahuc, Prof Francis Kramarz and Prof Pedro Martins

Recently, “Les Echos” journalist Dominique Seux observed that, in contrast with the abundant commentary on Greek economic woes, there is little discussion about the case of Portugal. A recent conference of Pedro Martins, one of the authors of this article and former Secretary of State of Employment in Portugal, provides us with the perfect occasion to revisit the recent evolution of Portugal’s labour market. 

Between 2008 and 2011, the minimum wage there increased by 20%. This increase was also broadly reflected in salaries beyond the minimum wage, thanks to centralized negotiation mechanisms featuring unrepresentative trade unions, with a membership below 10% that mostly represent permanent workers’ interests. Thus, when the recession started, these developments on wages amplified its impact on employment. From April 2008 to January 2013, unemployment rose from 8.6% to 17.7%, affecting mostly young workers. Permanent workers enjoyed one of the most restrictive regulations of the OECD, with its redundancy payments (one month per year of compensation) amongst the highest. In this situation, Portuguese youth was confined to temporary contracts, destroyed in a very large scale once economic activity cooled off. Among those below 25 years, unemployment rate surged from 20 to 40%. 

Austerity Politics and Administrative Reform: The Eurozone Crisis and its Impact upon Greek Public Administration

Dr Stella Ladi, Senior Lecturer in Public Management at Queen Mary's School of Business and Management presents her recent article; 

Austerity politics and administrative reform: The Eurozone crisis and its impact upon Greek public administration 

available here to read online or download in PDF.

Abstract:

Greece was the first European Monetary Union (EMU) country to sign a Memorandum of Economic and Financial Policies (MEFP) with the European Commission (EC) and the European Central Bank (ECB) in order to secure financial assistance and prevent a total collapse of its economy following the severe international economic crisis. The MEFP (2010) and the more detailed Memorandum of Understanding on Specific Economic Policy Conditionality (SEPC) (2010) offered elaborate steps of structural reforms that have affected all public services in Greece. The lack of major results and the stickiness of the ‘Greek problem’ have made Greece a unique case study for evaluating both the recipe of the international lenders and the domestic capacity for reform. A historical institutionalist approach and the concept of ‘policy paradigm’ are combined here in order to evaluate what the conditions for a major administrative reform in time of crisis are. The article focuses on the specific attempt to reform public administration during the Papandreou government in order to analyse the importance of both time and type of change in the success of a major reform programme.