Labour Market Segmentation in Poland Artur Gajdos Department of Spatial Econometrics University of Lodz gajdos@uni.lodz.pl Lisbon, 24 November 2016
Agenda Introduction Labour market facts Policy reforms implemented Conclusions
Introduction Global trends technology developments, changes in supply for goods and services, society ageing, skills mismatch, polarization, segmentation.
Methodology LFS data 1997-2015 (2002-2015) yearly data ISCED, ISCO-08, NACE rev.2, NUTS2, age groups (15-64), sex Poland and EU28 Employment Temporary Employees Permanent Employees
Employment dynamics in EU28 and Poland in years 2002-2015 (2002=100%) 120% 115% 110% 105% 117% 106% 100% 95% 90% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EU28 Poland
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Population by labour status in Poland (1000) 30000 25000 20000 15000 10000 Inactive persons Unemployed persons Employed persons 5000 0 Inactive persons: 31,9% - Poland (27,5% - EU28)
Employment by professional status in Poland (1000) 16.000 Contributing family workers Self-employed persons 12.000 Employees 8.000 4.000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Employment and unemployment in Poland (1000) 16000 Employed persons 15630 15812 15000 14000 14637 13380 13000 4000 3425 Unemployed persons 3000 2000 1000 1854 1207 1300 0
Activity rates (%) 75 72,5 70 68,6 70,3 68,1 65 64,9 63,2 100 80 60 60 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EU28 Poland 100 80 60 40 20 53,2 28,2 75,7 69,9 87,6 88,6 40 20 78,3 74,8 66,8 61,4 0 low medium high EU28 Poland 0 Males EU28 Poland Females
Employment rates (%) 70 65 60 62,3 65,7 65,6 59,2 62,9 55 51,7 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EU28 Poland Unemployment rates (%) 25 20 15 20,2 10 5 9,1 9,6 7,2 7,6 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EU28 Poland
Employment by educational attainment level in Poland (1000) 2.000 1.500 1.684 ISCED 0-2 (low) 1.318 1.000 893 500 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 11.000 10.500 ISCED 3-4 (medium) 10.604 10.000 9.500 9.701 9.698 6.000 5.000 4.000 ISCED 5-8 (high) 3.636 9.000 5.220 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3.000 2.000 2.124 1.000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Employment by educational attainment level in Poland (%) 100% 90% 80% 70% 15,7% 25,5% 33,0% high 60% 50% 40% 30% 71,8% 66,8% 61,3% medium 20% 10% 12,5% 0% 7,7% 5,6% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 low
Employment by sectors in Poland (1000) Agriculture Industry 2.200 2.000 1.800 2.074 1.793 4.000 3.800 3.600 3.400 3.789 3.655 1.600 2008 2009 2010 2011 2012 2013 2014 2015 3.200 2008 2009 2010 2011 2012 2013 2014 2015 Construction Services 1.400 9.500 9.169 1.300 1.200 1.229 1.194 9.000 8.500 8.466 1.100 2008 2009 2010 2011 2012 2013 2014 2015 8.000 2008 2009 2010 2011 2012 2013 2014 2015
Employment by sectors in UE28 and Poland in 2015 (%) 100% 90% 80% 70% 60% 72% 58% Services 50% 40% 30% 20% 10% 0% 7% 17% 4% EU28 8% 23% 11% Poland Construction Industry Agriculture
Employment by major occupational groups in Poland (1000) 1.100 Managers 3.500 Professionals 2.000 Technicians and associate professionals 900 2.500 1.700 700 2002 2006 2010 2014 1.500 2002 2006 2010 2014 1.400 2002 2006 2010 2014 1.200 1.000 Clerical support workers 2.500 2.000 Service and sales workers 3.000 2.000 Skilled agricultural, forestry and fishery workers 800 2002 2006 2010 2014 1.500 2002 2006 2010 2014 1.000 2002 2006 2010 2014 3.000 Craft and related trades workers 2.000 Plant and machine operators and assemblers 1.300 Elementary occupations 2.500 1.500 1.100 2.000 2002 2006 2010 2014 1.000 2002 2006 2010 2014 900 2002 2006 2010 2014
Total Managers Professionals Technicians and associate professionals Clerical support workers Service and sales workers Skilled agricultural, forestry and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Employment dynamics (2002-2015) by major occupational groups in EU28 and Poland (%) 120% 100% 80% 60% 40% 20% 0% -20% EU28 Poland -40% -60%
Temporary employees as percentage of the total number of employees in EU28 and Poland (%) 30 28,2 28,0 25 20 15 15,4 12,4 14,6 14,1 10 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EU28 Poland 80 30 60 20 40 72,7 28,0 27,9 20 0 43,3 27,0 13,0 16,6 6,7 15-24 25-49 50-64 EU28 Poland 10 0 13,8 14,5 Males Females EU28 Poland
Main reason for the temporary employment in EU28 and Poland in 2015 (%) 70 60 50 40 30 20 10 0 62,6 64,7 Could not find permanent job 11,8 14,5 17,0 11,7 8,7 9,2 Did not want a In education or permanent job training EU28 Poland Probationary period Main reason for the temporary employment in Poland in 2006 and 2015 (%) 100 80 60 40 20 0 75,9 64,7 Could not find permanent job 14,5 6,3 9,0 11,7 8,7 9,2 Did not want a permanent job In education or training 2006 2015 Probationary period
Temporary and permanent employees in Poland by educational attainment level (%) low medium high total 2002 26% 15% 11% 15% 74% 85% 89% 85% 2015 50% 50% 31% 20% 28% 69% 80% 72%
Temporary and permanent employees in Poland by sectors in 2015 (%) Activities of households as employers; Administrative and support service activities Accommodation and food service activities Construction Agriculture, forestry and fishing Other service activities Wholesale and retail trade; repair of motor Manufacturing Total Arts, entertainment and recreation Professional, scientific and technical activities Transportation and storage Information and communication Water supply; sewerage, waste management Financial and insurance activities Human health and social work activities Real estate activities Education Public administration and defence; Mining and quarrying Electricity, gas, steam and air conditioning 28% 72% 0% 20% 40% 60% 80% 100% Temporary employees Premanent employees
Temporary and permanent employees in Poland by major occupational groups in 2015 (%) Elementary occupations Service and sales workers Skilled agricultural, forestry and fishery workers Craft and related trades workers Clerical support workers Plant and machine operators and assemblers Armed forces occupations Total Technicians and associate professionals Professionals Managers 28% 72% 0% 20% 40% 60% 80% 100% Temporary employees Permanent employees
Temporary employees in Poland by regions (NUTS2) in 2015 (%)
Monthly earnings in Poland (EU28=100%) 50% 40% 30% 20% 10% 32% 38% 41% 0% 2006 2010 2014 Labour cost in Poland (EU28=100%) 36% 34% 32% 33,1% 33,5% 33,9% 34,4% 30% 2012 2013 2014 2015
Wages disparities by regions (NUTS2) in 2015 (Poland=100%)
Proportion of minimal and average wages in Poland (%) 50% 45% 40% 42% 45% 35% 30% 34% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Diagnosis Segmentation of the labour market in Poland: - the share of temporary employees is highest among the EU countries, - the share of people passing from temporary employment to permanent employment is low, - salaries are low and wage inequalities are highest among EU countries.
The main reasons for the use of temporary contracts: - inflexible labour law, - high non-wage labour costs. The main effects: - low quality of the jobs offered, - high level of temporary jobs. Recommendation: temporary employment reduction
Reforms implemented: Labour law reform - minimum monthly wages (2000 PLN/month), - minimum hourly wages (12 PLN/hour), - add non-wages labour costs (compulsory social security contributions) to temporary contracts for reduction its attractiveness for employers. Other proposals (future) - one uniform contract (with the period of employment as a criterion for rights, privileges) General action Social campaigns about shadow economy ( black labour market) and labour laws, especially for young employees.
Low wages problem Replacement effect Immigrants (above all from Ukraine) in construction, manufacturing, trade, services. 500+ effect (social benefit for parents) Moving to inactivity (women, clerks in public administration, saleswomen very low salaries). This processes could increase temporary employment and labour market segmentation.
Conclusions: economic background, employment changes, changes in structures, temporary employment, wages, reforms.
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