The “Family 500+” programme and female labour force participation in Poland. Demographic and economic determinants

Abstract

The paper investigates the effect of child cash benefit “Family 500+” on the female labour supply in Poland, taking into account demographic and cyclical determinants. The study is based on the Labour Force Survey (LFS) and Polish Central Statistical Office quarterly data. The analyses cover the period of 2016–2018. The Labour Force Participation Rate (LFPR) is the measure of labour supply. The analysis uses a counterfactual method to determine the impact of demographic and behavioural changes on female labour supply. To identify the causes of the economic inactivity of women (adopted by LFS), decomposition of the growth rate of economically inactive women is applied. The effect of the business cycle on female labour supply is analysed using OLS recursive regression. The study found that the LFPR of women aged 25–44 decreased after 2015. This was related to the cash transfers under the “Family 500+” programme and the increasing number of economically inactive women by reason of “family and household responsibilities”. At the same time, changes in the demographic structure contributed positively to the LFPR of women aged 25–44, while the business cycle did not have a significant impact on it. OLS recursive regression showed that in the 25–44 age group, the introduction of “Family 500+” coincided with changes in the relationships between the LFPR, the percentage of the “discouraged”, economically inactive women by reason of “family responsibilities” and the unemployment rate.