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Gradual restructuring and Structural Unemployment in Poland. A Legacy of Central Planning

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  • Hartmut Lehmann
  • Patrick Paul Walsh

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Abstract

In the transition to a market economy we examine the relationship between inherited human capital structures and the evolution of unemployment within a two-sector model of endogenous restructuring. We find evidence across Polish regions for the predictions of our theory. The inherited dominance of ineffective human capital in eastern regions of Poland has delayed restructuring, reduced unemployment turnover and lowered the number of workers with out-dated human capital in the unemployment stock. On the other hand, the dominance of effective human capital in western regions has induced restructuring, boosted unemployment turnover and increased the number of workers with out-dated human capital among the unemployed. We argue that the role of government to prevent such outcomes is limited. Yet, intervention conceived as social rather than economic policies can lessen the social cost created from the inheritance of out-dated human capital, which is a legacy of central planning.

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Bibliographic Info

Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 7899.

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Length: 39 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:lic:licosd:7899

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Keywords: Out-dated Human Capital; Restructuring; Unemployment and Poland;

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Cited by:
  1. David Katrencik & Joanna Tyrowicz & Piotr Wójcik, 2008. "Unemployment Convergence in Transition," Working Papers 2008-07, Faculty of Economic Sciences, University of Warsaw.
  2. Francesco Pastore & Joanna Tyrowicz, 2013. "Polish high unemployment and spatial labor turnover. Insights from panel data analysis using unemployment registry data," Working Papers 2013-18, Faculty of Economic Sciences, University of Warsaw.
  3. Pastore, Francesco & Tyrowicz, Joanna, 2012. "Labour Turnover and the Spatial Distribution of Unemployment: A Panel Data Analysis Using Employment Registry Data," IZA Discussion Papers 7074, Institute for the Study of Labor (IZA).
  4. Zuzana Brixiova & Wenli Li, 1998. "Skill Acquisition and Private Firm Creation in Transition Economies," William Davidson Institute Working Papers Series 162, William Davidson Institute at the University of Michigan.
  5. Pastore, Francesco, 2013. "Primum vivere… Industrial Change, Job Destruction and the Geographical Distribution of Unemployment," IZA Discussion Papers 7126, Institute for the Study of Labor (IZA).
  6. Joanna TYROWICZ & Piotr W�JCIK, 2009. "Some Remarks On The Effects Of Active Labour Market Policies In Post-Transition," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(2(8)_ Sum).
  7. H Ingham & M Ingham & J Herbst, 2008. "Why do Local Unemployment Rates in Poland Vary so Much?," Working Papers 594943, Lancaster University Management School, Economics Department.

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