Employment in Poland – 2009

The report ‘Employment in Poland 2009 – Entrepreneurship for Work’ is the fifth edition of the Employment in Poland series, a thorough study of the most significant processes occurring in the Polish and European labour markets. We hope that, as with previous editions, it will be an interesting and inspiring read, useful in your work and research.

Part I is devoted to the analysis of cyclical characteristics of the Polish labour market, presented in comparison with the EU and OECD economies. We examine the reaction of employment, unemployment and economic activity to economic fluctuations, in order to find out to what extent economic changes influence the labour market in Poland and other EU countries, especially New Member States. In this context, it is particularly important to compare the course and impact of the 2008-2009 crisis with the Russian crisis of 1998 and the economic downturn of 2001-2002. This analysis serves as the basis for the identification of shocks that have caused the most significant fluctuations in the Polish labour market and for the analysis of the nature of changes induced by these shocks. We outline the dynamics of the labour market fluctuations, followed by the description of the role that labour market and product mar- ket institutions play in adaptation to changing economic conditions. This provides the basis for further analyses in the subsequent parts of the report.

Part II addresses the issues of the long-term structural transformation of the Polish economy and its consequences for the labour mar- ket in its economic, social and institutional dimension. The starting point is the analysis of the scope and direction of changes in the sectoral structure of employment in Poland between 1996 and 2007, followed by the comparison with highly developed countries, especially the EU15, and other countries at a similar level of development (NMS). The examination of between-sector flows of labour, changes in the productivity of the Polish economy and individual sectors is used to identify areas where productivity differs from other countries. This enables deeper reflection on the nature of the convergence of the Polish economy and the Polish labour mar- ket, and pinpointing the areas in which results achieved by Poland could be improved, when compared with other countries in the region. Finally, in Part II we present an analysis of the impact of structural changes on labour market performance with regard to the adaptability of workers and the quality of working life.

In Part III, we analyse labour market flows on the Polish labour market and compare them with the situation in other countries. We present several measures of flows to quantify comprehensively the dynamics of these labour markets. Particularly important are the decompositions of unemployment fluctuations into contributions of hirings and dismissals, which enable the identification of chan- nels through which shocks affect the labour market in various countries. We expect these differences to depend on institutions, so in the second chapter we assess the impact of institutions of product and labour markets on the intensity of flows. We also discuss how the institutions crucial for labour market flows evolved in Poland and other OECD countries in 1996-2009. Therefore, the third part of this study brings a more thorough presentation of links between institutions and fluctuations in the labour market mentioned in Parts I and II.

Part IV discusses the crucial element of the institutional system of the labour market, i.e. social dialogue (collective bargaininbg) and its significance in the evolving labour market in Poland. We present a detailed analysis of issues often discussed in the literature but rarely mentioned in Poland. This part provides important elaboration of the institutional analysis presented in Part I-III of this study, describ- ing how the previously explained processes have influenced the social dialogue in Poland. Our analysis begins with description of the interdependences between the parties of social dialogue, both in the light of economic theory and in the international context. We present and evaluate the model of social dialogue in Poland, with special attention paid to the activities of the Tripartite Commis- sion for Socio-Economic Affairs, but also scrutinising the issues of autonomous dialogue and workers’ representation.

The report is completed with conclusions and recommendations how the adaptability of the Polish economy can be improved, es- pecially with regard to the institutional environment of the labour market. These policy prescriptions aim at mitigating the adverse social and economic impact of cyclical fluctuations and structural changes and increasing the potential for higher productivity growth and better international competitiveness at the same time.