Labor Market Reform in Poland

Labor Market Reform in Poland was adopted in 1989, right after the state socialism had collapsed. The main aim of the labor market reform in Poland was to increase the rate of employment. The main components of the labor market reform programs were macroeconomic stabilization and price stabilization and privatization of the state firms.

Initially these policies had not got much success; the Gross Domestic Product fell drastically and the unemployment rate increased as well. A fall in the public revenue, increasing expenses on pensions and unemployment benefits disturbed the macroeconomic stability. So after 1992, some new reform plans were implemented.

Reform Phases:

Sectoral Changes of Employment:

The economic reform in Poland had displaced the labor market. This displacement can be measured by the sectoral changes in the structure of employment. In Poland, displacement of employment was made relatively slowly in the agricultural sector than the service. Huge structural changes dislocated the labor force in a large number.
At the time of the labor displacement the labor market flexibility is very important for the labor to adjust.

Size Distribution of the State Enterprises:
The number of small and medium scale enterprises were increasing in Poland and by the end of 2001, 3.375 million enterprises registered themselves of which, maximum enterprises had less than ten workers only. The remaining state enterprises’ shares were growing rapidly with their size.

 

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