Greece's economic recovery post-pandemic has been remarkable, but demographic challenges and low labor force participation, particularly for women, hinder medium-term growth prospects. The report identifies key barriers to women's participation, including care responsibilities, skill mismatches, and weaknesses in the tax-benefit system.
Key barriers and findings:
- Labor force participation: Greece's working-age population is expected to decline by 35% by 2050, and women's LFP rate is 8 percentage points lower than the Euro area average.
- Care responsibilities: Over 70% of Greek children under three are outside formal childcare programs, and women cite care responsibilities as the top barrier to LFP.
- Skill mismatches: Greece's tertiary-educated unemployment rate is 8.5%, double the Euro area average, with women facing higher unemployment rates among college graduates.
- Tax-benefit system: Working couples with children face a high tax wedge, discouraging women from entering or remaining in the workforce.
Policy recommendations:
- Expand access to childcare facilities: Building new facilities, incentivizing conversions, and supporting private sector provision can alleviate care burdens.
- Improve parental leave policies: Extending more generous parental leave for fathers and the self-employed can enhance women's financial independence and LFP.
- Strengthen targeted tax-benefit incentives: Reducing the tax wedge for low-income households and improving unemployment benefits can incentivize women to work.
- Address skill mismatches: Coordinating education systems with labor market needs, expanding vocational training, and leveraging private sector participation can better align skills with economic demands.
- Complementary reforms: Enhancing business dynamism, reducing barriers to entry in service sectors, and improving workplace flexibility can further support women's LFP and economic growth.
Benefits of reforms:
- Addressing care impediments alone could boost Greek employment by an estimated 3%.
- Targeted measures, such as childcare-linked cash transfers and tax credits, can significantly empower women and boost economic growth at a moderate fiscal cost.
Judicial system efficiency:
- Greece's judicial system efficiency is among the lowest in the EU, hindering debt enforcement and insolvency proceedings.
- Key drivers of inefficiency include high demand for judiciary services, inadequate resources, and low digitalization levels.
- Judicial reforms, including court reorganization, digitalization, and training, can potentially boost economic performance through increased investment and productivity.
Policy implications:
- Setting up commercial courts can enable judges to specialize in commercial matters and improve efficiency.
- Robust judicial statistics and procedural efficiency are crucial for effective management and timely resource allocation.
- Continued development and regulation of insolvency professionals are essential for strengthening institutional capacity.
- Bold and swift policy actions are needed to address judicial inefficiency and create conditions for higher growth and economic resilience.
