Republic of Poland: Selected Issues

IMF Staff Country Reports, July 17, 2017

Source details

Poland faces profound demographic changes driven by a decline of fertility rate and growing life expectancy, mostly driven by longevity of older cohorts.
Demographics may soon pose a barrier for growth.
The historical expansion of working age population appears to have been only partly utilized to boost potential growth, with increased unemployment and declined labor force participation rates dampening potential gains.
Net migration was a drag on the labor supply in the past, but this has changed recently.
In addition to a steady outflow of permanent migrants, there was a sharp pickup in temporary migration after EU accession.

Policies should not only aim to support fertility, but also to:
- increase labor force participation rate,
- improve labor allocation across sectors,
- encourage net immigration.
Recent measures moving in the opposite direction risk undermining the effectiveness of mitigating policies and may prevent full offsetting of demographic headwinds.

Expanded working age population was not fully translated into higher potential growth due to:
- increased unemployment,
- declined labor force participation rates.
Improving labor allocation across sectors is highlighted as a necessary measure.

Past net migration reduced labor supply.
Recent developments indicate a change in that pattern.
Both a steady outflow of permanent migrants and a sharp pickup in temporary migration after EU accession are noted.

International Monetary Fund. Republic of Poland: Selected Issues, July 17, 2017.