Reasons Behind the Structural Unemployment in Poland - A Cross-Country Regression Analysis

Sammanfattning: The study focused on possible reasons behind Poland’s structural unemployment. The purpose was to examine and provide a macroeconomic explanation for this phenomenon. The labour market was scrutinized by utilizing cross-country analysis that related Poland with seven other Central- and Eastern European countries; the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Slovakia and Slovenia. The study examined if structural causes might be part of the reason behind Poland’s sluggish labour market, by applying three elements that might have an affect namely; human capital, employment protection legislation and spending on active labour market programmes. The study was based on the main hypothesis regarding that poor human capital is associated with the structural unemployment in Poland. Two different labour market approaches were examined in the study, initially by applying a panel regression model and subsequently by analysing the unemployment – output growth relationship, acknowledged as Okun’s law. The results supports the central hypothesis concerning that inadequate human capital can be associated to the poor labour market performance in Poland.