Poland in Transition: Labor Market Data Collection

By Socha, Mieczyslaw Waclaw; Weisberg, Yaacov | Monthly Labor Review, September 1999 | Go to article overview

Poland in Transition: Labor Market Data Collection


Socha, Mieczyslaw Waclaw, Weisberg, Yaacov, Monthly Labor Review


Ever since its labor market structure changed along the lines of a free-market economy in 1989, Poland has adopted new techniques and tools for data collection; the country's database now provides cross-sectional and longitudinal indicators of the dynamics of the labor market

In 1989, Poland became the first member of the former Soviet bloc to reestablish political democracy and a market economy. The fledgling government was faced with a stagnant economy, inflationary pressure, a large external debt, and market inefficiencies. Gross domestic product (GDP) was nearly stagnant, growing by only 0.2 percent, consumer prices had risen by 250 percent, and real wages increased by 9 percent.(1)

In view of the economic situation, the new government introduced radical measures that were intended to stabilize the economy and encourage the development of a free market. The country's much publicized "shock therapy" had begun.

In 1990-91, Poland experienced a deep recession throughout which GDP decreased by almost 20 percent, the demand for labor decreased, and unemployment increased. During the first 3 years of the nation's transformation, both the State sector and the cooperative sector lost 4.6 million jobs, while the flourishing private sector created 2.6 million new jobs.(2) In 1992, the number of unemployed reached 2.8 million, of whom 80 percent had been previously employed.

Since 1992, Poland has experienced annual economic growth ranging from 3 percent to 7 percent; correspondingly, inflation decreased from 585 percent in 1990 to 11.8 percent in 1998. Employment has increased, unemployment has begun to decrease, and real wages have risen once more.

The emerging modern market economy of Poland has required a new economic structure, a strong private sector, and the reallocation of the labor force across sectors, firms, skills, and regions. The burden on legislators has been that, to introduce new policies, a good understanding of the labor market and its dynamics is necessary. In effect, one must know how labor market indicators are measured and how data are being collected? The same burden falls on analysts: in an economy that is changing from a centralized to a market system, the structure, quantity, and quality of data are highly important for both cross-sectional and trend analyses. Accordingly, this article examines the sources and methods of data collection under both the previous centralized system and the current modern, "Western"-type economy of Poland.

The Polish labor market

The economic system of Poland before the transition was characterized by disequilibrium in the labor market, overemployment, a surplus of vacancies compared with the number of jobseekers, a concentration of employment in agriculture and industry, and an underdeveloped service sector.

Labor force participation, employment, and unemployment. According to the Polish Population Census, the population of Poland consisted of 38.0 million people in 1989 and was increasing very slowly. By 1998, the population had grown to just 38.6 million, an average annual growth rate of 0.22 percent.

The labor force participation rate decreased from 65.3 percent in 1988 to 56 percent in May 1998. During the 1980s, the employment level was relatively stable, reaching 17.4 million in 1989, but in 1995 total employment was about 15 percent lower than it had been in 1989, and the number of jobs in the public sector as a whole had decreased by 40 percent.

In the profit sector (which includes both private and some State-run firms), the decline in employment between 1989 and 1995 was even sharper, reaching almost 60 percent. By contrast, employment in the private sector increased by 13 percent, and in nonagricultural private firms it rose by more than 155 percent.(4) Hired employment (workers employed on the basis of a labor contract of some kind)fell by 23 percent, while self-employment increased by nearly 22 percent, mostly in the nonagricultural sector. …

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