## Republic of Poland: Selected Issues

_IMF Staff Country Reports, February 6, 2019_

## Source details

**Canonical URL:** [Republic of Poland: Selected Issues](https://www.imf.org/en/publications/cr/issues/2019/02/05/republic-of-poland-selected-issues-46577)

## Other formats

- [Markdown version](/en/publications/cr/issues/2019/02/05/republic-of-poland-selected-issues-46577/index.md)
- [Structured JSON version](/en/publications/cr/issues/2019/02/05/republic-of-poland-selected-issues-46577/index.json)
- [Bundle manifest](/en/publications/cr/issues/2019/02/05/republic-of-poland-selected-issues-46577/bundle-manifest.json)

## Bibliographic details
- Published: February 6, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484397541.002

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### Summary and purpose
- Selected Issues paper reviewing factors that drive wage growth in Poland and studying structural characteristics and firm-level total factor productivity (TFP) in Poland and Emerging Europe.
- Examines the increase in real unit labor costs (RULC) alongside an unprecedently tight labor market.
- Uses an Error-correction model to more systematically identify long- and short-term drivers of Polish wages.
- Analyses use both Statistics Poland and Orbis data to assess firm-level TFP dynamics.

### Key findings on wage dynamics and RULC
- The increase in real unit labor costs (RULC) occurred alongside an unprecedently tight labor market.
- RULC dynamics are more subdued compared with the pre-crisis period, despite a now-lower unemployment rate; this may reflect the recent influx of foreign workers.

### Drivers of wages (methodology and results)
- An Error-correction model is used to identify long- and short-term drivers of Polish wages.
- The model-based analysis aims to separate persistent wage determinants from transitory factors (short-run dynamics).

### TFP and firm-level findings
- Analyses using Statistics Poland and Orbis data show that foreign-owned firms are associated with strong TFP performance through above-average TFP levels and growth rates.
- Findings point to structural heterogeneity across firms, with ownership structure linked to TFP dynamics.

### Policy implications and recommendations
- Create an environment conducive to entrepreneurship by reducing barriers to entry.
- Ensure a level playing field between state owned and private firms.
- Avoid barriers to scaling up businesses.
- Encourage investments in innovation and research and development.

### Subjects and keywords
- Subjects: Employment, Labor, Labor markets, Labor productivity, Production, Real wages, Total factor productivity, Wages
- Keywords: CR, dampening effect, Eastern Europe, Employment, firm, Global, ISCR, Labor productivity, laggard firm, nominal wage, ownership structure, Real wages, share, support wage, TFP dynamics, Total factor productivity, wage, wage growth, Wages

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## Content in this bundle

- **Country Report**
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_Source: https://www.imf.org/en/publications/cr/issues/2019/02/05/republic-of-poland-selected-issues-46577_