Is There an ‘Unemployment Hysteresis’ Effect in Poland?
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Publish date: 2006-12-31
Gospodarka Narodowa 2006;212(11-12):25–46
The study sets out to determine if it is possible to speak of an “unemployment hysteresis” effect in Poland. The paper uses two research methods: a descriptive analysis of structural factors that maybe responsible for changes in the Non-Accelerating Inflation Rate of Unemployment (NAIRU) in Poland; and the Gordon method (1989), on the basis of which the author checks the hypothesis about the existence of unemployment hysteresis in Poland. The analysis showed that structural changes were unlikely to contribute to an increase in NAIRU. On the basis of the Gordon model the author demonstrated that there was no reason to reject the hypothesis about the occurrence of “full unemployment hysteresis” in Poland. Even though the results obtained by the author do not clearly confirm that Polish unemployment is indeed characterized by hysteresis, it seems that this lag effect may explain why Poland still suffers from high unemployment, the author notes. The hysteresis effect is primarily due to the outflow of labor and an insufficient level of human capital in the Polish economy.