Making the Labour Market Work Better in Poland

Poor labour-market outcomes remain one of Poland’s major structural weaknesses, impeding firms’ competitivenessand the nation’s potential output. Boosting employment prospects is also critical, as the country will soon be ageing ata fast pace. Despite long working hours, labour utilisation is only average due to structurally low employment rates,particularly at both ends of the age spectrum, with some marked regional differences. The female employment rate isespecially low, in part due to poorly designed family and pension policies. Insufficient product-market competitionand obstacles to internal mobility induce significant resource misallocation. Employment protection is not particularlystringent, but the labour market is nonetheless heavily segmented. This is likely to weigh on economic performanceby limiting investment in human capital and making some specific groups bear a large share of adjustment costs.Public employment services suffer from a lack of resources and function inefficiently. Local labour offices havelimited incentives to adopt best practices the government plans to start benchmarking them. There is ample scope totighten jobseeker obligations and reform social and tax policies to make work pay. This Working Paper relates to the2014 OECD Economic Survey of Poland (www.oecd.org/eco/surveys/economic-survey-poland.htm).