A study of the regional distribution of unemployment in Poland's economic transition
From the outbreak of unemployment in Poland in 1990, through the long
recession and current macroeconomic revival, the regional pattern of unemployment
remained remarkably unchanged. The thesis takes a micro-econometric approach to the
issue, using the Polish Labour Force Survey, 1994-'97. It is found that persistence in
regional patterns of unemployment is determined mainly by continuously higher flows of
workers from employment to unemployment, rather than by lower flows out of
unemployment in high unemployment regions. Thus, it would be wrong to think of high
unemployment", regions simply as pockets of especially long duration unemployment.
Moreover, the rate of inflow from employment to unemployment is significantly
correlated with the degree of structural change.
The econometric analysis concentrates on the outflows from employment to
unemployment. The estimates are based on survival models with flexible baseline
hazard. The first important finding is that, controlling for personal and environmental
characteristics, there are significant differences in the probability of flowing into
unemployment from a job for prime-aged workers (aged 25 through 44) in high and low
unemployment regions. This age-effect is predominant over any other effect if one
decomposes the mean and coefficient differences.
When the focus is on prime-aged workers, structural change, as driven by the
restructuring, and privatisation process of state owned firms in the manufacturing sector,
becomes apparent. Especially strong is the difference in the probability of flowing into
unemployment in industries with a high intensity of labour, independent of the level of
physical and human capital, detected applying the Neven taxonomy. They provide their
-employees with particularly secure jobs in low, but not in high unemployment regions.
This 'result is consistent with hat of occupations with different skills. The semi-skilled
workers, manual and non-manual, have a much lower probability of job loss than that of
skilled workers in low unemployment regions. Education attainment provides a better
defence against unemployment in high unemployment regions. Other individual-specific
factors, such as gender and marital status, show no regional differences.
Furthermore, a development in the method of analysing the effects of structural
change on unemployment is proposed. How much of the inflow gap and, ultimately, the
unemployment gap between the top and bottom groups of voivodships is due to economic
structural change? In the case of Poland, the analysis suggests an upper bound of about