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

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Author Info
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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File URL: http://www.econ.kuleuven.ac.be/licos/DP/DP1999/LICOSDP78.pdf
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Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 7899.

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

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

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Find related papers by JEL classification:
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
L0 - Industrial Organization - - General
O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Boeri, Tito, 1997. "Heterogeneous workers, economic transformation and the stagnancy of transitional unemployment," European Economic Review, Elsevier, vol. 41(3-5), pages 905-914, April. [Downloadable!] (restricted)
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  4. Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Alexander Repkine & Patrick P. Walsh, 1998. "European Trade and Foreign Direct Investment U-Shaping Industrial Output in Central and Eastern Europe - Theory and Evidence," IMF Working Papers 98/150, International Monetary Fund.
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  6. Burgess, Robin & Stern, Nicholas, 1993. "Taxation and Development," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 762-830, June. [Downloadable!] (restricted)
  7. Machin, Steve & Van Reenen, John, 1996. "Technology and Changes in Skill Structure: Evidence from an International Panel of Industries," CEPR Discussion Papers 1434, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Commander, Simon & Tolstopiatenko, Andrei, 1996. "Restructuring and taxation in transition economies," Policy Research Working Paper Series 1625, The World Bank. [Downloadable!]
  9. Zuzana Brixiova, 1997. "On the Speed of Transition in Central and Eastern Europe: Does On-the-Job Search Matter?," IMF Working Papers 97/102, International Monetary Fund.
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  11. Eric A. Strobl & Patrick P. Walsh, 1996. "Structural Change and Long-Term Unemployment in Ireland," Economics Technical Papers 9610, Trinity College Dublin, Department of Economics.
  12. Eli Berman & John Bound & Stephen Machin, 1998. "Implications Of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1245-1279, November. [Downloadable!] (restricted)
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  13. Sneessens, Henri, 1995. "Asymmetric Growth Effects, Skill Mismatch and Unemployment Persistence," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1995025, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  14. Konings, Jozef & Walsh, Patrick P, 1994. "Evidence of Efficiency Wage Payments in UK Firm Level Panel Data," Economic Journal, Royal Economic Society, vol. 104(424), pages 542-55, May. [Downloadable!] (restricted)
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  15. Boeri, Tito & Scarpetta, Stefano, 1996. "Regional mismatch and the transition to a market economy," Labour Economics, Elsevier, vol. 3(3), pages 233-254, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Andrew Newell & Francesco Pastore, 2000. "Regional Unemployment and Industrial Restructuring in Poland," CELPE Discussion Papers 51, CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy. [Downloadable!]
    Other versions:
  2. Fiona Duffy & Patrick Paul Walsh, 2000. "A Regional Analysis of Wage Determination in Poland," LICOS Discussion Papers 8700, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  3. 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 Stephen M. Ross Business School. [Downloadable!]
  4. Francesco Pastore, 2005. "To Study or to Work? Education and Labour Market Participation of Young People in Poland," IZA Discussion Papers 1793, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Anna Maria Ferragina & Francesco Pastore, 2005. "Mind the Gap: Unemployment in the New EU Regions," IZA Discussion Papers 1565, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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