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Regional Unemployment in Poland: A Legacy of Central Planning

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  • Patrick Paul Walsh

Abstract

We model job reallocation and unemployment as outcomes jointly determined by the structure of inherited social capital within a two-sector Optimal Speed of Transition model. Treating regions of Poland as independent labour markets, the socio-economic inheritance of regions is found to be a legacy of planning that determines regional job reallocation rates. In turn, higher rates of (instrumented) regional job reallocation is shown to boost regional unemployment turnover, reduce the duration of frictional and increase the incidence of structural unemployment. At the regional level, the benefit system facilitates the job reallocation process and accumulates out-of-date human capital.

Suggested Citation

  • Patrick Paul Walsh, 2000. "Regional Unemployment in Poland: A Legacy of Central Planning," LICOS Discussion Papers 9100, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    • Handle: RePEc:lic:licosd:9100
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp91.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dries, Liesbeth & Swinnen, Johan F. M., 2002. "Institutional Reform and Labor Reallocation During Transition: Theory Evidence From Polish Agriculture," World Development, Elsevier, vol. 30(3), pages 457-474, March.
    2. Pasquale Tridico, 2006. "Institutional Change and Governance Indexes in Transition Economies: the case of Poland," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 3(2), pages 197-238, December.
    3. Fiona Duffy & Patrick Paul Walsh, 2000. "Individual Pay and Outside Options: Evidence from the Polish Labour Force Survey," William Davidson Institute Working Papers Series 364, William Davidson Institute at the University of Michigan.

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    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • L0 - Industrial Organization - - General
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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