Regional unemployment dynamics and active labour market policy in Poland in comparative perspective

The thesis analyses the regional labour market dynamics and effectiveness of active labour market policies in Poland. The main research focus is to assess the effectiveness o f the elem ents o f ALMPs and to suggest possible explanations of the heterogeneity in their outcomes. I am interested in establishing how effective are the various components o f ALM Ps in alleviating the regional differences in unemployment. The objective is to arrive at recommendations regarding the appropriate mix of policy response to the unemployment problem. The lessons that relate to Poland may also be applied to other countries undergoing a process o f deep structural changes. In particular, I am interested in establishing how effective are the various components of ALMPs in alleviating the regional differences in unemployment. The experiences of the Spanish labour market reforms are used to understand the likely trajectory induced by a similar liberalisation process and labour market institutional reform in Poland. I argue that the institutional reforms in Spain led to better labour market performance and the same outcome may be expected in Poland if similar reforms are implemented. In the econom etric part o f thesis, I investigate the persistence o f unem ploym ent in the Polish and Spanish labour markets, which demonstrate that the unemployment problem is more serious than indicated by the aggregate figures. I also measure the effectiveness of the labour m arket policies and draw conclusions for policy makers, arguing that the unem ploym ent problem can be alleviated if the appropriate policy mix is applied. In particular, I have shown to what extent regional employment, unemployment and participation rate dynam ics are common to all regions in Spain and Poland. The results indicate very strong regional unemployment persistence, especially in poorer regions in both countries. Both o f the investigated markets reacted to shocks in a similar way. However, higher persistence in the response of unem ploym ent to shocks has been measured in Spain than in Poland. On the other hand, Polish regional labour markets are more dissim ilar than the Spanish ones, indicating m ore inequality in access to employment. The results on the efficiency of ALMPs also demonstrate differences between agricultural, modern and industrial regions and different patterns o f impact in line with the results on the regional labour market dynamics. The agricultural regions, with higher unemployment respond to the ALMPs weaker than the other regions. These findings are in line with the results of VAR analysis of regional labour market dynamics, which show a great persistence in unemployment, especially in the poorer regions, indicating that they do not respond in the same way as the other regions. I now offer a novel explanation to this structural outcome: the existing persistence in inter-regional differences in unemployment may be (partly) resulting from the fact that the policy measures are not adjusted and are not used selectively consistent with the local economic environment. The results permit the drawing out of a tentative conclusion that ALMPs in Poland should be reassessed as for their efficiency. The policies should be carefully designed and should take into account the different types of regions, which might have different needs and requirements. A troublesome result is that the regions where policy support is most needed are also those, which are least responsive to policy tools.