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Dual labour market in Poland – proposals for overcoming the deadlock

Author

Listed:
  • Piotr Arak
  • Piotr Lewandowski
  • Piotr Zakowiecki

Abstract

The report discusses the phenomenon of dual labour market, which in Poland involves abuse of the possibility to hire employees under civil law contracts. The report also proposes solutions aimed at curbing this phenomenon. We propose introducing a so-called single contract, adapted to the Polish specificity, which would make it easier for companies to hire employees in a flexible manner, at the same time opening to employees the door to stable employment. We also call for reducing those employment-related obligations placed on small companies which are not related to protecting employees against dismissal or to their wages, but generate additional costs. Furthermore, we propose reducing the taxation of low earners who are at risk of being forced to work under civil law contracts or self-employment. This can be achieved by increasing the tax deductible expenses and raising the basic income tax rate from 18% to 20%, such change being neutral for the state budget. Our proposals are aimed at finding a nw balance between the interests of employers and the needs of workers in Poland.

Suggested Citation

  • Piotr Arak & Piotr Lewandowski & Piotr Zakowiecki, 2014. "Dual labour market in Poland – proposals for overcoming the deadlock," IBS Policy Papers 1/2014, Instytut Badan Strukturalnych.
  • Handle: RePEc:ibt:ppaper:pp012014
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    File URL: http://ibs.org.pl/app/uploads/2015/10/IBS_Policy_Paper_01-2014_streszczenie.pdf
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    References listed on IDEAS

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    1. Jean-Marc Fournier & Isabell Koske, 2012. "The determinants of earnings inequality: evidence from quantile regressions," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 7-36.
    2. Anna Baranowska, 2011. "Trash contracts? The impact of temporary employment on leaving the parental home in Poland," Working Papers 44, Institute of Statistics and Demography, Warsaw School of Economics.
    3. Maciej Bukowski & Sonia Buchholtz & Piotr Lewandowski & Pawel Chrostek & Agnieszka Kaminska & Maciej Lis & Monika Potoczna & Michal Myck & Michal Kundera & Monika Oczkowska, 2013. "Employment in Poland 2011. Poverty and Jobs," Books and Reports published by IBS, Instytut Badan Strukturalnych, number zwp2011 edited by Maciej Bukowski & Iga Magda.
      • Magda, Iga & Bukowski, Maciej & Buchholz, Sonia & Lewandowski, Piotr & Chrostek, Paweł & Kamińska, Agnieszka & Lis, Maciej & Potoczna, Monika & Myck, Michał & Kundera, Michał & Oczkowska, Monika, 2013. "Employment in Poland 2011 - Poverty and jobs," MPRA Paper 50185, University Library of Munich, Germany.
    4. Tito Boeri & Jan van Ours, 2013. "The Economics of Imperfect Labor Markets: Second Edition," Economics Books, Princeton University Press, edition 1, number 10142, December.
    5. Boeri, Tito, 2011. "Institutional Reforms and Dualism in European Labor Markets," Handbook of Labor Economics, Elsevier.
    6. Piotr Lewandowski & Agnieszka Kaminska, 2015. "In-Work Poverty in Poland: Diagnosis and Possible Remedies," IBS Research Reports 01/2015, Instytut Badan Strukturalnych.
    7. Christopher T. Whelan & Bertrand Maitre & Brian Nolan, 2011. "Analysing Intergenerational Influences on Income Poverty and Economic Vulnerability with EU-SILC," Working Papers 201125, Geary Institute, University College Dublin.
    8. Agnieszka Chlon-Dominczak & Maciej Lis, 2013. "Does gender matter for lifelong learning activity?," IBS Working Papers 3/2013, Instytut Badan Strukturalnych.
    9. Werner Eichhorst & Michela Braga & Ulrike Famira-Mühlberger & Maarten Gerard & Thomas Horvath & Martin Kahanec & Marta Kahancová & Michael J. Kendzia & Monika Martišková & Paola Monti & Jakob Louis Pe, 2013. "Social Protection Rights of Economically Dependent Self-Employed Workers," WIFO Studies, WIFO, number 46989, January.
    10. Michal Myck & Mateusz Najsztub, 2015. "Data and Model Cross-validation to Improve Accuracy of Microsimulation Results: Estimates for the Polish Household Budget Survey," International Journal of Microsimulation, International Microsimulation Association, vol. 8(1), pages 33-66.
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    Citations

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    Cited by:

    1. Piotr Lewandowski & Agnieszka Kaminska, 2015. "The effects of minimum wage on a labour market with high temporary employment," IBS Working Papers 7/2015, Instytut Badan Strukturalnych.
    2. Marek Gora & Piotr Lewandowski & Maciej Lis, 2017. "Temporary employment boom in Poland – a job quality vs. quantity trade-off?," IBS Working Papers 04/2017, Instytut Badan Strukturalnych.
    3. World Bank Group, 2014. "Balancing Flexibility and Worker Protection," World Bank Other Operational Studies 23024, The World Bank.
    4. Piotr Lewandowski & Kamil Stronski & Roma Keister, 2015. "Labour market segmentation and pensions in the Polish defined-contribution scheme," IBS Working Papers 9/2015, Instytut Badan Strukturalnych.

    More about this item

    Keywords

    employment; Poland; labour market duality; fixed-term contracts;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J8 - Labor and Demographic Economics - - Labor Standards

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