Volume 3, ISSUE1/2012 - Review of Applied Socio-Economic ...

ISSN: 2247-6172
ISSN-L: 2247-6172
Review of Applied Socio- Economic Research
(Volume 3, Issue 1/ 2012 ), pp. xxx-xxx
URL: http://www.reaser.eu
e-mail: editors@reaser.eu
concentrated on the provision of measures able to absorb the excess labor in neglected Areas of the
country.
5. Conclusion
Having explained the two main characteristics of regional labor markets, that of labor mobility
and wage fixing, it was shown both diagrammatically and algebraically that the two main features of the
regional problem are a persistent rate of regional unemployment and a deficient national production, i.e.
production below the maximum attainable levels. The algebraic explanation indicated further a
prescription for the solution of the regional problem, that of differentiated labor subsidies in amounts
pertinent to investors' cost calculations in their production-planning process, and not the provision of
capital cost differentials. On the basis of these facts an evaluation of the Greek regional incentive
policy was made to indicate the discrepancy between the regional incentive measures used and the
above-prescribed conditions. More specifically it was shown that no proper consideration was given to
the importance of labor subsidies as a means for the solution of the regional unemployment problem,
while capital cost differentials existed to an extensive degree. A shift of investment then to developing
areas was found, which could have mainly contributed to the provision of regional investment subsidies.
But it was indicated that capital intensive industries were those that had caused the shift and thus investment
incentive provisions did not succeed in resolving the regional unemployment problem; furthermore
these provisions could have provided the basis for national production below the economy’s maximum
attainable possibilities. The main conclusion is that a more efficient regional policy is needed regarding
the provision of industrial incentives, consistent with some theoretical principles that have been well
founded.
6. References
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