Institutional determinants of regional diversity of labor market in Poland

Beata Woźniak-Jęchorek

doi:10.12775/equil.2015.007

Abstract

The article focuses on regional diversity of the Polish Labor Market from institutional perspective. The Polish Labor Market is geographically diverse in terms of unemployment and employment rates, and also in terms of economic development. At the end of 2013 the difference between the lowest and the highest unemployment rate in the Polish regions was 12.1% (Wielkopolska located in the West Poland has unemployment rate of 9.6% and Warmia - Mazury in the East has unemployment of 21.7%). The question arises whether this difference comes from the structural or institutional sources. The paper describe the character of Polish Labor Market, whereas in the second part, it traces the impact of institutional variables such as real wage, Kaitz index and Gender gap on the regional unemployment rate in 2002–2012 in Poland.

Highlights

The economic crisis that first broke out in 2008 has taken a tremendous toll on labor markets across the EU
The aim of this paper is to present this regional diversity of the Polish Labor Market from the institutional perspective
The indicators are the following: − Average real wage in the corporate sector, − Gender gap defined as the difference in activity between men and women, − Kaitz index calculated as the ratio of the minimum wage to the average wage

Summary

Introduction

The economic crisis that first broke out in 2008 has taken a tremendous toll on labor markets across the EU. In terms of economic growth, Poland remained “Green Island”, but on the other hand, the Polish Labor Market remains highly diversified with some structural and institutional problems. The most important are: benefits, participation-friendly schemes, labor taxation, wage setting, employment protection legislation, union density and active labor market policies (skills developments, youth employment and job creation). Such institutions affect the efficiency of an economy. Bad institutions lower incentives to invest, to work and to produce (Sala-iMartin, 2002)

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