by Mieczyslaw Kabaj, 1996
Abstract
Unemployment has lately gained enormous economic, social and political importance in Poland and the other transition countries. Its size has considerably exceeded what might be expected from unavoidable frictional unemployment. It has become a mass, chronic and structural phenomenon involving heavy economic costs and social hardships which should and must be reduced in the near future.
The problems currently facing the Polish economy are not limited to mass open unemployment, but also include hidden rural and urban unemployment. In the not too distant future there will be an accelerated increase in labour force supply due to the second post-war demographic boom.
Falling open and hidden unemployment, together with fuller use of the rapidly growing labour force, are factors which may develop and stimulate growth. However, the active labour market policy which has been used to combat unemployment so far has failed to make much of a dent in the problem. Recent experience would seem to suggest that a more productive approach would involve the combination of labour market policy with active employment oriented development policies. The present study advocates the adoption of such a strategy as soon as possible.
The key questions are: why has unemployment in Poland grown so rapidly in comparison with the OECD countries; why has an active labour market policy failed to limit rapid unemployment growth and to reduce it; are we justified in attributing part of the problem to mistakes in economic policy; what can we do to reduce unemployment by half; to what extent could unutilised human resources be employed to expand productive employment and to accelerate economic development?
The study is divided into two parts. Part 1 deals with the unemployment growth due to economic transition, its structure, causes and consequences. In Part 2 an attempt is made to evaluate the effectiveness of labour market policies and programmes, and their impact. It suggests alternative strategies and programmes for promoting productive employment and reducing unemployment by half by the year 2000. Four programmes for counteracting unemployment which led to a fall in unemployment of about 260,000 in 1994 and 1995 are also evaluated. This experience in elaborating and implementing integrated programmes for reducing unemployment will be of interest also to those dealing with similar problems in other transition countries.
Table of Contents
Introduction
Part I. Strategic Diagnosis
1. Human Resources and the Role of Employment in Economic Development
2. Fall in the Employment of Human Resources and Structural Revolution
3. Unemployment
1.Unemployment: Level and Structure
2.Three Aspects of Unemployment
4. Major Causes of Unemployment
5. Costs of Unemployment
6. Employment and Unemployment until the Year 2000
1.Projection of Increase in Labour supply
2.Projections of Economic Growth and Employment (1996-2000)
3.Projected Unemployment until the Year 2000
Part II. Programmes and Strategies for Counteracting Unemployment
1.Evaluation of Efficiency of Applied Methods of Counteracting Unemployment
2.The Impact of Active Labour Market Programmes on Unemployment
3.An Integrated Programme for the Promotion of Employment and the Reduction of Unemployment (Towards an Employment-oriented Development Strategy)
Employment-oriented (dual) Strategy of Development
A. Nine Macroeconomic Elements of the Programme
1. Promoting Optimal Non-inflationary Effective Demand
2. Promoting employment through better utilisation of productive capacities and multiple shift-working
3. Promoting investment
4. Housing construction programme
5. Promoting small enterprise development and self-employment
6. Expansion of exports and optimisation of imports
7. Promotion of rational restructuring
8. Promotion of employment through reduction of social taxes on wages
9. Better co-ordination of vocational education with current and expected labour market demand
B. Active Labour Market Programmes
Suggestions for Reform of the Labour Fund
C. Deregulation of the Labour Market and Flexible Employment
D. Institutional Conditions for Counteracting Unemployment
Concluding Remarks
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