When Eastern Labour Markets Enter Western Europe CEECs. Labour Market Institutions upon Euro Zone Accession

This paper reviews the literature on the labour market institutions in European Union Member States in the context of monetary integration. Traditionally, labour markets are a key concept in the optimal currency area theory, playing the role of the only accommodation mechanism of asymmetric shocks after the monetary unification. There are several theoretical frameworks linking the institutional design of the labour market to the potential effectiveness of monetary policy in the context of currency areas. Many empirical studies addressed these issues too, yielding important policy implications for labour market reforms in the process of monetary unification. However, there seem to be "white spots" in this patchwork, which may actually be particularly useful from the perspective of CEECs upon the accession to the euro zone. We suggest these research directions encompassing labour supply and theoretical frameworks of labour market flexibility benchmarking in the context of monetary integration.labour market institutions; monetary integration; labour market reform; CEECs; EMU

Blame No One? Investment Decisions of the Polish Stock-listed Companies

It is often raised that enterprises in transition countries are cursed with credit constraints and insufficient capital. Regardless of whether this belief holds for the whole of the economy, the Agency Theory provides a useful both theoretical and empirical framework helping to verify the efficiency of investment decisions in case of companies for which 'objective' future cash-flow valuation is available. The assertion of managerial discretion has been verified empirically for many different countries with the analytical background provided by user cost of capital and Tobin's Q theories. This paper’s contribution is the analysis of the Polish stock-listed companies behavior with the particular attention devoted to the corporate governance issues. We find that on average these companies overinvest relative to their opportunities, while this phenomenon is more severe in the case of even partial state ownership.financial constraints, investments decisions, system GMM, Poland, stock-exchange, managerial discretion

When Eastern Labour Markets Enter Western Europe CEECs. Labour Market Institutions upon Euro Zone Accession

This paper reviews the literature on the labour market institutions in European Union Member States in the context of monetary integration. Traditionally, labour markets are a key concept in the optimal currency area theory, playing the role of the only accommodation mechanism of asymmetric shocks after the monetary unification. There are several theoretical frameworks linking the institutional design of the labour market to the potential effectiveness of monetary policy in the context of currency areas. Many empirical studies addressed these issues too, yielding important policy implications for labour market reforms in the process of monetary unification. However, there seem to be "white spots" in this patchwork, which may actually be particularly useful from the perspective of CEECs upon the accession to the euro zone. We suggest these research directions encompassing labour supply and theoretical frameworks of labour market flexibility benchmarking in the context of monetary integration.labour market institutions, monetary integration, labour market reform, CEECs, EMU

Active Labour Market Policies and Unemployment Convergence in Transition

In this paper we approach the issue of social cohesion across NUTS4 regions in Poland. We analyse regional dynamics of unemployment rates and try to evaluate the impact of Active Labour Market Policies (ALMPs) in observed trends. Using data for 1999 till 2008 we employ tools typically applied to income convergence analyses to test the stability of unemployment distribution - both unconditionally and taking into account explanatory power of unemployment structure and ALMPs in Polish regions. Our findings suggest no unconditional convergence understood both in terms of levels and in terms of dispersion, while the latter seems to suggest "convergence of clubs" within a group highest unemploy- ment regions. The analysis comprised as well accounting for potential impact of ALMPs, controlling for dierentiated unemployment structure. We find no evidence that cohesion eorts contribute to the convergence or less of the divergence phenomena.regional unemployment rate differentials, convergence analysis, Poland

Active Labour Market Services Privided by NGOS - The Potential for Social Capital Building In Poland

This paper bases on thirty case studies performed in Polish NGOs providing active labour market services to differentiated groups of beneficiaries. Paper describes behavioural patterns of Polish non-profits which substitute the public service in implementing active labour market policies, focused on high-risk groups of the unemployed. The described patterns emerge in an institutional environment which is characterized by powerful bureaucracy, scarcity of social capital, high level of generalized distrust and an the very low level of support for civic initiatives on the side of public administration and its agencies, still strongly prejudiced against non-profits. In such situation NGOs see their task beyond handing out public money – they are trying to engage into multiple cooperative games at grass-roots level, building networks of fragmented groups of charities, independent experts and self-help initiatives. Forging such spontaneous alliances help to build bonds among different social groups (which rises the level of bridging social capital) and strongly supports the unemployed beneficiaries themselves, giving them access to new social networks. On the other side, the strategy in which public employment services and local authorities are (self)excluded ends up with the impossibility to develop a long-term employment policy both on local and central level. Thus the only win-win strategy is the one in which the public – non-profit cooperation is enhanced through the effort of self-limiting on both sides. We support the thesis that engaging public agencies into cooperative games with NGOs and subsequent empowering of nonprofits should lead towards remodelling of the whole labour market policy in Poland and improve the quality of employment services.social capital; NGOs; ALMPs; Poland

Labour Market Racial Discrimination in South Africa Revisited

Discrimination is a significant issue in labour market economics across developed as well as developing countries. In this paper, we inquire the actual size of wage discrimination in the Republic of South Africa, accounting for large differences in individual endowments. We apply the Oaxaca-Blinder decomposition as well as propensity score matching to adequately determine the role of discrimination in the wage gaps observed. Although the size of the absolute racial wage gap is enormous, amounting for more than 500%, the actual estimated effect non-attributable to other factors ranges between 45%-55%. This estimator, however, assumes homogenous discrimination across the wage distribution, while data suggest that there are significant educational, sectoral and occupational differentials. To account for these effects, we implement propensity score matching by finding “statistical twins” of the White population among the Black population, thus we demonstrate how wages differ between these groups in comparable labour market situations. Here too we find that wages for the White are on average approximately 30% higher, while the effects vary at quartiles of the wage distribution.discrimination, Oaxaca-Blinder decomposition, propensity score matching, Republic of South Africa, racial wage gap

Active Labour Market Policies and Unemployment Convergence in Transition

In this paper we approach the issue of social cohesion across local labour markets in Poland. We analyse regional dynamics of unemployment rates and try to evaluate the impact of Active Labour Market Policies (ALMPs) in observed trends. Using data from 1999 till 2008 we employ tools typically applied to income convergence analyses to test the stability of unemployment distribution - both unconditionally and taking into account explanatory power of unemployment structure and ALMPs in Polish regions. Results give no support to the hypothesis of unconditional convergence understood both in terms of levels and in terms of dispersion. Among the highest unemployment regions, however, data seem to suggest "convergence of clubs". The analysis included also account- ing for potential impact of ALMPs, controlling for differentiated unemployment structure. We find no evidence that cohesion efforts contribute to more of the convergence or less of the divergence phenomena.regional unemployment rate differentials, convergence analysis, Poland

Nonlinear Stochastic Convergence Analysis of Regional Unemployment Rates in Poland

This paper analyzes convergence of unemployment rates in Poland at the local level by testing nonlinear convergence, applying the modified KSS-CHLL test for each pair of territorial units. The results suggest that actually the convergence is a rare phenomenon and occurs only in 3 227 cases out of potential over 70 000 combinations. This paper inquires which systematic reasons contribute to this phenomenon. There are some circumstances under which unemployment convergence should be more awaited than in the others. These include sharing a higher level territorial authority, expe- riencing similar labour market hardship or sharing the same structural characteristics. For each of these three criteria we analyse the frequency of the differential non-stationarity within groups as evidence of convergence or Òcatching upÓ.nonlinear stochastic convergence, regional unemployment, Poland

Is the Impact Really That High? The Effect of FDI in Transition

Literature is not clear on the effect of FDI on the economic performance in hosting countries. The analysed effects include productivity, propensity to export, access to financial markets, etc. Although foreign subsidiaries usually perform better than the average of the hosting economies, sometimes the selection effect is found to be considerable. In this paper we use a unique dataset based on accounting annual reports to the statistical authorities by all medium and large Polish enterprises over a period 1997-2006. We apply a propensity score matching technique to disentangle the effect of self-selection and FDI entry (treatment). We also distinguish explicitly between foreign ownership and privatisation through a foreign investor. We find strong support of the view that foreign ownership increases access to financing. Evidence suggests also that although FDI enters more frequently companies who already participate in the international trading networks, 20% of the export intensity may be consistently attributed to the treatment effect. On the other hand, we were not able to confirm large effects on efficiency, nor in the case of rentability, while the sizes of the effects are different for greenfield and private acquisitions as opposed to privatisation.FDI, transition, propensity score matching

(In)Efficiency of Matching - The Case of A Post-transition Economy

This paper approaches the question of efficiency in job placement using regional data for Polish regions (policy relevant NUTS 4 level) over the time span of 2000-2008. Using a unique data set we estimate the matching function using stochastic frontier as well as difference-in-difference estimators. We use also managed to combine this unique data set with another unique source of data on the ALMPs coverage, unemployment structure across time and regions as well as the individual capacity of local labour offices. We use these data to explain the exceptional variation in estimated efficiency scores. Our findings suggest that matching abilities are highly driven by demand fluctuations, while unemployment structure, ALMPs and individual labour office capacities have little explanatory power. Although without individual data it is fairly impossible to provide a reliable counterfactual, we raise some arguments to support the claim of job placement inefficiency by public employment services in Poland.matching function, stochastic frontier, Poland