Demographic Challenges Facing Long-Term Growth in Greece

Abstract

Looking beyond the immediate issues surrounding negotiations between Greece and its creditors, the short-term issues facing the Greek economy are reasonably well understood. But what about the longer term? Looking at comparative performance in a number of other developed economies in the post-crisis world this chapter argues that both growth and capital expenditure are likely to underperform current expectations, especially as the impact of an older and smaller working population begins to lock in. The loss of human capital from Greece during the crisis has been severe, and promoting the return of those highly educated Greek citizens who left during the crisis years must become a priority. Attracting immigrants will also be important in ensuring stable public finances, and policies directed towards changing public attitudes in this regard are also paramount, as are labour market policies aimed at increasing the female and over 65 participation rates.