Jobless growth: a new challenge for the transition economy of Poland

Purpose - To explain the sources of jobless growth in Poland, the country undergoing economic system transition and integration with the European Union (EU). Design/methodology/approach - The research used the Harrod‐Domar model together with an interpretation proposed by Barro and Sala‐i‐Martin to determine the growth threshold level of jobless growth in Poland. The technical, econometric calculation does not dominate the paper, which is destined for both academic and non‐academic readers studying the phenomenon of jobless growth. Findings - The paper provides a review of literature and theories of jobless growth. The calculations show that Poland has a high threshold of jobless growth. The Polish GDP needs to grow at least 4 per cent to add new jobs. Research limitations/implications - To evaluate the overall long run impact of labor productivity on the job market one needs to include the growth of non‐manufacturing jobs in the service sectors which accommodate the needs of more affluent worker/consumers. This long‐term analysis is outside the scope of the paper. Practical implications - The authors calculated an important variable for the Polish economy, i.e. the threshold growth rate of jobless growth, which indicates a minimum rate of growth, needed to create a net demand for labor. This research is likely to be quoted by the economists studying sources of unemployment in Poland and as well as in any high growth economies. Originality/value - It is the only research known to the authors attempting to explain high level of unemployment in transition economies using recognized economic theories. The paper contributes to a better understanding of the phenomenon of jobless growth in market economies in general.