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Contents of issue 9/2013

Beata Woźniak-Jęchorek - The Structure of the Labor Market in Institutional Economics, summary, article

Włodzimierz Kołodziejczak, Feliks Wysocki - The Nature of Unemployment in Poland in 2006-2009, summary, article

Bartłomiej Rokicki - The Evolution of Regional Real Wage Differentials in Poland, summary, article

Aleksandra Majchrowska, Katarzyna Mroczek, Tomasz Tokarski - Unemployment Rate Variations in Poland in 2002-2011, summary, article

Krzysztof Bartosik - Structural Change, Business Cycles and Employment in Poland’s Manufacturing Sector, summary, article

Leszek Wincenciak, Mateusz Zys - The Determinants of Atypical Forms of Employment in Poland, summary, article


Book Review: Grzegorz W. Kołodko, Dokąd zmierza świat? Ekonomia polityczna przyszłości (Whither the World? Political Economy of the Future), Prószyński i S-ka, Warsaw 2013, 448 pp. - reviewed by Ryszard Michalski

Book Review: John Kenneth Galbraith, Godne społeczeństwo. Program troski o ludzkość (The Good Society: The Humane Agenda), Polskie Towarzystwo Ekonomiczne, Warsaw 2012, 126 pp. - reviewed by Marek Lubiński


Globalization, Politics, Ethics III - Tadeusz Smuga

Beata Woźniak-Jęchorek - The Structure of the Labor Market in Institutional Economics

The article focuses on the institutional structure of the labor market as seen through the lens of institutional economics.
Institutional economics assumes that there is an interaction between people and organizations and examines the rules of this interaction. It argues that economic analysis should be interdisciplinary and focus on social, cultural, political and historical aspects. This is especially important for the analysis of the modern labor market, where cultural factors play a major role, the author says. These theoretical findings combined with the current situation on the labor market lead the author to formulate an assumption that labor market studies failing to take into account formal and informal institutions may result in an incomplete picture of the labor market. That is why the main objective of the article is to define the institutional structure of the labor market, the author says.
The paper presents the assumptions of institutional economics, describes the institutional approach used in labor market studies, and defines the concept of labor market institutions. The author discusses the structure of the labor market by referring to the concept of different levels of economic analysis developed by O.E. Williamson, a proponent of new institutional economics. Using Williamson’s findings, Woźniak-Jęchorek sets out to identify relationships between different levels of economic analysis in the context of labor market functioning. The proposed theoretical model introduces the concept of the social value of work, assuming that informal and formal institutions influence the perception of the value of work and determine the behavior of people on the labor market. The value of work is evaluated from different angles, including an economic perspective (individuals have to work to earn money for a living), a social perspective (individuals need social interaction and integration), and a task-based perspective (individuals need to achieve objectives by completing tasks). Each perspective determines the behavior of people on the labor market. In classical terms, the value of work is reflected in wage disparities, but today there is a  growing need for a mixed approach combining economic, social, and ecological values, Woźniak-Jęchorek says. Defining the institutional structure of the labor market is a starting point for further empirical research that could contribute to a more effective government policy toward the labor market, the author concludes.

Keywords: institutional economics, labor market, formal and informal institutions
JEL classification codes: B15, B25, B52, J08
Article: PDF

Włodzimierz Kołodziejczak, Feliks Wysocki - The Nature of Unemployment in Poland in 2006-2009

The paper aims to identify the nature of unemployment and factors determining its level in Poland from 2006 to 2009. The research was conducted on the basis of selected unpublished data for both the entire population (Poland as a whole) covered by labor force surveys and for specific population groups singled out on the basis of characteristics such as gender, age, education, and place of residence. The so-called labor market flows approach – Inflow-Outflow Analysis (IOA) – was used to assess the rates of inflow to and outflow from unemployment, as well as the average duration of unemployment. Using the CEPR method developed by the London-based Centre for Economic Policy Research (CEPR), based on the analysis of flows between different states of economic activity of the population, the natural rate of unemployment was calculated. The estimated values of the natural rate of unemployment were compared with the real unemployment rate and the Non-Accelerating Inflation Rate of Unemployment (NAIRU) in each quarter of the analyzed period. Then, the relationship between the real unemployment rate and the natural rate of unemployment in each population group was examined to determine the size of the structural and cyclical components of unemployment. When analyzing the relationship between the CEPR natural rate of unemployment and the real unemployment rate, the authors distinguished three sub-periods in the studied period. In the first sub-period, the real unemployment rate decreased, while the natural rate of unemployment increased. In the second sub-period, the natural rate of unemployment mirrored the real unemployment rate. In the third sub-period, the gap between the real unemployment rate and the natural rate of unemployment widened as a result of a halted decline in the real unemployment rate. Some population groups and problem areas were isolated, where despite the structural nature of unemployment, it is reasonable to take action aimed at stimulating economic activity and job creation. In terms of the urban-rural breakdown, the smallest towns and rural areas are the key problem areas, and in terms of labor force characteristics, the youngest people entering the labor market as well as poorly educated individuals and those nearing retirement are the main problem groups. Gender is an important determinant of both employment and the risk of unemployment, the authors say, but the differences between men and women in this area were smaller than expected.

Keywords: labor force survey, natural rate of unemployment, Inflow-Outflow Analysis (IOA), Non-Accelerating Inflation Rate of Unemployment (NAIRU), labor market flows
JEL classification codes: J20, J63, J64, J68
Article: PDF

Bartłomiej Rokicki - The Evolution of Regional Real Wage Differentials in Poland

The paper aims to offer an empirical verification of a hypothesis concerning real wage equalization among Poland’s regions. Unlike most previous studies, which focus on the evolution of nominal wages, the article uses regional purchasing power parity (PPP) deflators to analyze the evolution of real wages.
Regional labor market disparities in Poland, including regional wage differentials, have been amply discussed in research papers, the author says. Such an analysis is important, he adds, because regional wage differentials frequently determine migration decisions. Some theoretical models suggest that the outflow of workers from regions with lower wages partially reduces regional disparities in unemployment rates. However, other models show that regional unemployment rate differentials in fact increase as a result of labor force migration, Rokicki says.
Most authors focus on the correlation between the growth and the initial level of wages (beta convergence) and on the evolution of the regional dispersion of wages (sigma convergence), according to Rokicki. The results of these analyses imply the existence of a divergence process in recent decades. The author argues, however, that these results may be significantly biased. Rokicki’s own analysis, based on wages adjusted with regional PPP deflators, suggests that the divergence trend reversed in the second half of the previous decade – in favor of a convergence process that has been at work ever since then.

Keywords: real wages, convergence, regional disparities, labor market
JEL classification codes: E31, J31, R11, R23
Article: PDF

Aleksandra Majchrowska, Katarzyna Mroczek, Tomasz Tokarski - Unemployment Rate Variations in Poland in 2002-2011

The article offers a descriptive and statistical analysis of the differentiation of registered unemployment across local areas in Poland. The author looks at the determinants of registered unemployment and changes in the trend from 2002 to 2011. The article analyzes the impact of geographical, historical and administrative factors on differences in unemployment at the county level. Moreover, on the basis of a theoretical model, the author analyzes changes in unemployment in the studied period.
The research makes use of several basic methods used in spatial econometrics, including a fixed-effects regression model.
The study shows that some of the differences in unemployment rates by county are due to administrative factors, such as the distance from a county to the largest city in a specific province and the type of county: whether it is an urban or rural area. Counties located closer to the administrative centers of their respective provinces and counties located in urban areas tended to have lower average unemployment rates during the studied period, the authors say.
Historical factors also play a role, according to the authors: unemployment rates in areas of Poland formerly under Austrian and German rule tended to be lower than in other regions.
The analysis of changes in unemployment rates in the studied period shows that labor market adjustments at the county level are dynamic and asymmetrical, the authors say. The analysis also shows that past unemployment rates have a significant impact on the growth of unemployment in future periods and that the scope of changes in unemployment is asymmetrical. Generally, labor market adjustments in urban counties were more asymmetrical than in rural counties, the authors say.

Keywords: labor market, unemployment, fixed-effects regression, Okun’s law
JEL classification codes: R23, J64
Article: PDF

Krzysztof Bartosik - Structural Change, Business Cycles and Employment in Poland’s Manufacturing Sector

The article examines the impact of changes in the sector breakdown of employment on the level of employment in Poland’s manufacturing industry. To investigate the scope of structural changes, the author uses a method originally developed by Groshen and Potter (2003). The method assumes that changes in employment are structural in nature if they have the same direction at a time of both recession and recovery (for example, if employment in the sector rises or falls in both periods). Cyclical changes occur if their direction at a time of recession is different from that at a time of recovery – for example, if employment in the sector falls during a recession, while rising at a time of recovery, the author says.
The study finds that sectors that lost out as a result of structural changes in the analyzed period accounted for a decreasing proportion of total manufacturing sector employment. At the same time, the role of pro-cyclical sectors increased, the author says. He adds that the drop in demand for labor related to the economic downturn at the end of the last decade was less acute than the decline at the end of the preceding decade. This shows that traditional macroeconomic policies can have a greater impact on employment than other measures, especially in manufacturing, Bartosik concludes.

Keywords: employment, sector breakdown, business cycle, manufacturing
JEL classification codes: J23, J21,E24
Article: PDF

Leszek Wincenciak, Mateusz Zys - The Determinants of Atypical Forms of Employment in Poland

The article examines factors determining atypical forms of employment for graduates in Poland.
According to the authors, labor market entry in Poland increasingly takes place through atypical – or flexible – forms of employment understood as any form of employment different than a permanent contract of employment.
The role of atypical forms of employment in Poland has steadily increased since the country’s transition to a market economy in 1989, the authors say. Between 2001 and 2011, the proportion of these forms of employment in the 15-24 age group rose by 32 percentage points, while the average increase in the EU as a whole was only 3.5 points.
International empirical studies show that atypical forms of employment can significantly influence many aspects of a professional career, the authors say. Some researchers argue that atypical forms of employment have a negative impact on wages (D. Bertrand-Cloodt et al. 2011; F. McGinnity et al. 2005) as well as on job satisfaction (M. de Graaf-Zijl 2005).
Against this background, the authors set out to establish what individual characteristics determine the probability of atypical employment. They use logit models to identify individual determinants of short-term employment as well as of various forms of freelancing and post-graduate internships. The data comes from a special project administered by the Polish Ministry of Labor and Social Policy, called A Study of the Economic Activity of Graduates.
The authors identify factors that increase the probability of atypical forms of employment. The most prominent factors include having graduated after 2004, being a woman, having a low level of education, postponing your labor market entry, and getting a first job that does not match your education profile, Wincenciak and Zys say. On the other hand, graduates with a university education and those whose parents are better educated are more likely to find permanent employment, the authors say.

Keywords: labor market, atypical/flexible employment, graduate, logit model
JEL classification codes: J21, J41
Article: PDF

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