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Housing and labor market distortions in Poland : linkages and policy implications

Author

Listed:
  • Mayo, Stephen K.
  • Stein, James I.
  • INU

Abstract

Poland's housing and macroeconomic policies have restricted investments in housing and urban infrastructure to a level well below that of other European countries. This has resulted in a shortage of housing typified by 15 to 20 year waits for government sponsored housing. Shortages of this magnitude are likely to cause distortions with impacts on patterns of savings and consumption, the price level, and on the functioning of labor markets. This paper focuses particularly on how housing market distortions are transmitted to labor markets, with impacts on rates of migration, relative wage levels among different regions, and, by implication, on the productivity of the Polish work force. The basic thesis of the paper is that if housing markets are prevented from reaching their competitive equilibrium that labor markets will similarly be prevented. Evidence is examined on the extent of housing and labor market disequilibria, and estimates econometric models that relate internal migration and relative wages to alternative measures of housing market disequilibria. From these analyses it is concluded that labor markets are in fact distorted by housing market distortions, with potentially major macroeconomic costs.

Suggested Citation

  • Mayo, Stephen K. & Stein, James I. & INU, 1988. "Housing and labor market distortions in Poland : linkages and policy implications," Policy Research Working Paper Series 361, The World Bank.
  • Handle: RePEc:wbk:wbrwps:361
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    References listed on IDEAS

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    1. Burns, Leland S & Grebler, Leo, 1976. " Resource Allocation to Housing Investment: A Comparative International Study," Economic Development and Cultural Change, University of Chicago Press, vol. 25(1), pages 95-121, October.
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    Cited by:

    1. J.M. Pogodzinski, 1995. "The Effect of Housing Market Disequilibrium on the Supply of Labor: Evidence from Poland, 1989-1990," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(4), pages 497-527.
    2. Subrata Ghatak & Alan Mulhern & John Watson, 2008. "Inter-Regional Migration in Transition Economies: The Case of Poland," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 209-222, February.
    3. Pierella Paci & Erwin R. Tiongson & Mateusz Walewski & Jacek Liwinski & Maria M. Stoilkova, 2007. "Internal Labor Mobility in Central Europe and the Baltic Region," World Bank Publications, The World Bank, number 6598, January.
    4. Hardman, Anna M. & Ioannides, Yannis M., 1995. "Moving behavior and the housing market," Regional Science and Urban Economics, Elsevier, vol. 25(1), pages 21-39, February.
    5. David Dale-Johnson & Stuart A. Gabriel, 1995. "Introduction: Deregulation and Reform of Housing and Housing Finance Markets: Recent Lessons from Western and Central Europe," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(4), pages 395-400.
    6. Deichmann, Uwe & Henderson, Vernon, 2000. "Urban and regional dynamics in Poland," Policy Research Working Paper Series 2457, The World Bank.

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