The Effect of Unemployment Benefits on the Probability of Re‐employment in Poland
| DOI | http://doi.org/10.1111/1468-0084.00118 |
| Date | 01 February 1999 |
| Published date | 01 February 1999 |
| Author | Vera Adamchik |
THE EFFECT OF UNEMPLOYMENT BENEFITS ON
THE PROBABILITY OF RE-EMPLOYMENT IN
POLAND
Vera Adamchiky
I. INTRODUCTION
In the mid 1990s in Poland, the of®cial number of unemployed ¯uctuated
around 2.5± 2.6 million, that is, 14± 16 percent of the labour force. Despite
the fact that in recent years the of®cial rate of unemployment has slightly
decreased1, unemployment still remains one of the most important econom-
ic problems. In order to support the income of unemployed and to
reintegrate jobless people into work, both passive (unemployment bene®ts)
and active (training, public works, start-up loans, etc.) labour market
policies can be used. In Poland, however, passive income support has
dominated active programs. In 1992±1995, spending on unemployment
bene®ts increased 2.4 times and constituted more than 99 percent of the
total public expenditure on labour market policies.2
Since a large share of bene®t payments is covered by the state budget and
further increases in employers' contributions are limited3, the Polish govern-
ment modi®ed the unemployment bene®t system many times4in order to
reduce the administrative burden under severe budget constraints. The more
restrictive legislation led to a noticeable decline in the percentage of
unemployed workers receiving unemployment bene®ts (from 79% of the
OXFORD BULLETIN OF ECONOMICS AND STATISTICS, 61, 1 (1999)
0305-9049
95
#Blackwell Publishers Ltd, 1999. Published by Blackwell Publishers, 108 Cowley Road, Oxford
OX4 1JF,UK and 350 Main Street, Malden, MA 02148, USA.
yThis paper was written while the author was a research fellowat the Central and East European
Economic Research Center, Department of Economics, Warsaw University, Poland. I would like
to thank A. Bedi, W. Charemza, L. Herk, A. King, K. Rybinski, E. Syczewska, R. Thornton, S.
Wellisz for helpful advice and comments.
116.0, 14.9, and 13.6% at the end of 1994, 1995 and 1996 respectively. Central Statistical
Of®ce, 1996 Statistical Yearbook, Warsaw,p. 135.
2Ibid., pp. 140, 158. Calculations are made by the author.
3Employment contribution rates in Poland are 3% of payroll for the Labor Fund and 45% for
the Social Security Fund. These rates are higher than in many west-European countries.
4Among the most dramatic changes were: (a) the initially unlimited bene®t entitlement period
was reduced to 12 months; (b) the system based on bene®ts linked to the previous earnings and
declining over time was replaced with a ¯at rate (36% of the economy-wide average wage in the
previous quarter) bene®t system; (c) the eligibility requirement of at least 180 days of work
experience during the preceding year was introduced. However, the number of exceptions for
speci®c groups (school-leavers, older unemployed, people in high-unemployment regions) is still
long.
5Central Statisticlal Of®ce, 1996 Statistical Yearbook, Warsaw,p. 135.
To continue reading
Request your trial