IMF Staff Country Reports

This Selected Issues paper analyzes key barriers to labor force participation (LFP) in Greece using household and cross-country data and draw on the literature and simulations to discuss policy options, particularly for women for whom the LFP gap is the largest. Using household survey data and cross-country comparisons, the paper identifies three main constraints: (1) care responsibilities; (2) skill mismatches; and (3) weaknesses in the tax-benefit system that reduce work incentives for second earners. Labor force survey data suggest that LFP gender gaps in Greece occur mainly during the working age. Estimates suggest that addressing care responsibilities alone could boost employment by 3 percent. Policy recommendations include expanding access to childcare facilities, improving parental leave policies, strengthening targeted tax-benefit incentives, and reforms to address skill mismatches through enhanced private sector participation in education and training. These measures, combined with complementary reforms to boost business dynamism and workplace flexibility, could significantly empower women to boost economic growth and prosperity in Greece.