Navigating Through Crisis: A Case Study of the Greek Sovereign Debt Crisis and Its Migratory Effects

Abstract: This study explores the patterns of emigration from Greece and migration rates within Greece in the aftermath of the Greek Sovereign Debt Crisis. Employing the Synthetic Control Method (SCM), we construct a hypothetical, counterfactual to Greece, the Synthetic Greece. Our key findings include a marked increase in emigration with emigration rates 0.87% above those of Synthetic Greece between 2009 and 2021. These rates remain consistently high suggesting a lasting effect of the Greek sovereign debt crisis on Greek emigration. Further, our analysis identifies the key economic drivers behind this emigration trend, notably stagnant unemployment rates and GDP per capita. The study also delves into domestic migration and reveals a statistically significant increase in emigration from Greek metropolitan areas relative to its synthetic control unit. Similarly, emigration from rural areas increased, however, this effect was much lower in magnitude and statistically insignificant. Recent years have shown signs of a gradual recovery in these trends. Lastly, we identify negative correlations between the change in net migration rates and most economic variables, indicating that Greeks were more inclined to emigrate from financial centres. Overall, this research sheds light on demographic changes in post-crisis Greece, offering quantitative insight into the migration dynamics set off by one of the biggest economic challenges the Eurozone has faced to date.