IMF Staff Country Reports

Republic of Poland : Selected Issues

Author/Editor:

International Monetary Fund. European Dept.

Publication Date:

February 6, 2019

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This Selected Issues paper reviews factors that drive wage growth in Poland and studies structural characteristics and firm-level total factor productivity (TFP) in Poland and emerging Europe. The increase in real unit labor costs occurred alongside an unprecedently tight labor market. The study points out that more subdued real unit labor cost dynamics compared with the precrisis period—despite the now lower unemployment rate—may reflect the recent influx of foreign workers. In order to more systematically identify the long- and short-term drivers of Polish wages, an error-correction model was used. Analyses presented in the paper using both Statistics Poland and Orbis data show that foreign-owned firms are associated with strong TFP performance through above-average TFP levels and growth rates. The findings suggest the need for an environment conducive to entrepreneurship by reducing barriers to entry and ensuring a level playing field between state-owned and private firms, avoiding barriers to scaling up businesses, and encouraging investment in innovation and research and development.

Series:

Country Report No. 19/38

Subject:

Economic sectors Employment Europe Labor market characteristics Poland Production Total factor productivity