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3. Employment & Entrepreneurship

3.1 General context

Last update: 28 November 2023
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  1. Labour market situation in the country
  2. Main concepts

Labour market situation in the country


The question of youth employment is one of the country’s key public policy areas. High youth unemployment has been a persistent characteristic of the Polish labour market since the regime change 1989. In the first 15 years of the market economy, the difficult situation of school graduates was largely due to the general conditions in the labour market, including: shortage of labour demand (the economy was not creative enough to provide new jobs), large supply of workforce (a period of intense demographic pressure associated with baby boomers entering the labour market), mismatch between the occupation and qualification structure of the population and the changing labour market needs, and imperfect institutional arrangements to support the unemployed (according to: Study of the Professional Activity of Graduates in the Context of Implementation of the First Job Programme. [Badanie aktywności zawodowej absolwentów w kontekście realizacji programu „Pierwsza praca”. Raport], Ministry Labour and Social Policy, Warsaw 2008.). Those factors determined the professional fate of all Poles, including graduates of various types of schools. However, in spite of being exposed to the same set of circumstances arising from changes in the labour market, the youth unemployment rate had always been higher than that among older generations. 

The market economy brought higher educational expectations and more opportunities for the education of young people, especially at third level. One contributing factor was the partial privatisation of higher education, which caused a snowballing increase in the number of those institutions. In the 2016/2017 academic year, 1,348,800 people were studying at 390 third-level schools, compared to just over 400,000 people in 112 schools in 1990/1991. After many years of increase in number of higher education institutions, since the academic year 2010/2011 a decrease can be observed (this situation affects mainly private higher education institutions). The gross enrolment ratio in higher education increased during that time from 12.9% in the academic year 1990/1991 to 53.8%  in 2010/2011. After 2011 it began to decrease and in the academic year 2016/2017 was at the level of 47,4%. Higher education began to be treated as a remedy for, and a chance to avoid, unemployment. At the same time, there was a decrease in interest in vocational training among young people and a marginalisation of vocational education.  

In the first decades of the political transformation, the main action taken by the state for the youth was a policy of counteracting unemployment. Before the accession of Poland to the EU (2004), the youth (under 25 years old) unemployment rate exceeded 40% and was the highest among Member States (Eurostat). 

The persistent lack of jobs and satisfactory career prospects for increasingly better educated young people resulted in mass emigration after the opening of the EU labour market. According to estimates by the Central Statistical Office of Poland (Główny Urząd Statystyczny - GUS), at the end of 2016 around 2 515 000 Polish people were temporarily living outside of Poland, i.e. 118 000 (4,7%) more than in 2015. In Europe alone, in 2016 there were about 2 214 000 Polish people, with the vast majority – about 2 096 000 – living in the Member States of the EU countries, the highest number was in the United Kingdom (788 000), Germany (687 000), the Netherlands (116 000), and Ireland (112 000).  

The mass emigration, the increase in financial outlays for active labour market policies (ALMP) targeted at young people (e.g. from public and European funds), and the growth of jobs in the economy have all contributed to the gradual decrease in youth unemployment. 

However, the increase in employment was achieved through the development of various forms of unstable employment. Young people were often employed on temporary contracts or civil law contracts (without social security contributions being paid for them). According to Eurostat estimates, in 2014 more than half of the people employed in Poland aged 15 to 29 worked on fixed-term contracts, which was the highest share of this type of employment in the EU (Eurostat).  The lack of stable employment did not allow for building sustainable professional careers of young employees and young people themselves experienced a strong feeling of social inequality. As a result, an overrepresentation of young people found themselves in a category known as the working poor. 

The gap between the qualifications and skills of graduates and the needs of the economy and the labour market had also been widening. 

The high unemployment rate among young people, the rise of unstable employment and the mass emigration of young people have prompted the authors of reports on youth to label them as the “lost generation”, a dreary prospect that could only be averted by decisive action through public policies (a report prepared on the initiative of the government, The Youth of 2011, 2011: 180). 

Poland has been actively involved in the implementation of the EU Youth Employment Package (2012) designed to boost employment among young people. In December 2013, a roadmap for the implementation of the Youth Guarantee Initiative was developed. Poland, as an EU Member State with more than 25% of youth unemployment (persons aged 15 to 24), has been provided with support through the Youth Employment Initiative and is expected to receive EUR 550 million from EU funds. 

Situation on the labour market (from 2016 – I quarter 2020) 

The labour market situation in Poland has been steadily improving since 2016 (until Q1 2020, the outbreak of the pandemic). Overall unemployment rates registered with labour offices have fallen below 10%. The fall in unemployment and the increase in employment and wages have made Poland an attractive place to work for foreigners, and the employer's market has gradually transformed into an employee's market. 

In 2015-2019, a systematic increase in the number of issued work permits for foreigners was observed in Poland. In 2019, 444.7 thousand of them were issued. This was 116.0 thousand more than in 2018 and 379.0 thousand more than in 2015

On the other hand, employers are reporting shortages of workers with increasing frequency, including high-end professionals as well as skilled and unskilled workers (e.g. for seasonal jobs in agriculture or cleaning jobs). From 2016, further migration  

reports and public opinion polls showed a decline in youth declarations regarding the desire to emigrate for work, which is linked to the improved situation in the labour market. 

The situation on the labour market in Poland is improving, however is still unsatisfactory. Compared to other age groups, young people in Poland (under 25 years old) are characterised by a very low professional activity rate (only 35%) and low employment rate.  

In Q4 2019, only 34.9% of people aged 15-24 were economically active and the employment rate was 32.1%. The main reason for economic inactivity of young people in Poland is being in education and completing qualifications (this reason for economic inactivity is indicated by about 90% of economically inactive people aged 15-24). The unemployment rate in the 15-24 age group was 7.9% (data for the fourth quarter of 2019, LFS, Central Statistical Office of Poland, CSO).   

The more difficult labour market situation of young people is often due to a lack of professional experience and a mismatch between qualifications and labour market needs. In order to increase the possibility of finding a suitable job, young people decide to improve their professional qualifications by continuing their education, doing internships, apprenticeships or enrolling in various supplementary courses during their education. 

In surveys of secondary school students conducted by Public Opinion Research Centre (CBOS) (in 2018), the most frequently expressed belief was that the solution to problems with finding a job is to enrol in further education courses: 29% (in 2008 it was 20%). However, interest in continuing higher education fell from 15 to 8 per cent. The alternatives to not having a job continue to be: going abroad - 25%, or setting up one's own business 12%.  

The survey yielded the following responses:  

- enrolling in further education courses - 29% (2008 - 20%); 

- going abroad - 26% (2008 - 26%);  

- taking up any employment, not necessarily in the profession - 19% (2008 - 19%)  

- starting own company - 12% (2008 - 14%);  

- continuing education - 8% (2008 - 15%); 

- moving to another city - 5% (2008 - 3%).  

- I would not do anything - 1% (2008 - 0).   

When examining the potential for entrepreneurship among youth, the 2018 survey conducted by the Public Opinion Research Centre (CBOS) asked about the readiness to attempt running one's own business in the unspecified future. It turned out that three fifths of respondents (60%) do not rule out such an eventuality. Only one in ten respondents (10%) rejected the possibility of taking risks associated with their own business. On the other hand, almost every third student (30%) was unable to assess whether they would ever be able to set up their own business. 

Main concepts

In recent years, along with a systematic decrease in the unemployment rate, including youth unemployment, young people's attitudes towards the labour market and assessment of their own chances on the job market have been changing. In 2013-2018, according to the Public Opinion Research Centre (CBOS) survey (for 2018), the percentage of students who fear that they will not find a job almost halved (from 63% to 30%), and at the same time the number of those who assume that they will be employed, or are sure about it, doubled (from 36% to 70%). The belief that finding a job depends on individual abilities and qualifications, courage and entrepreneurship in the context of seeking employment is growing, while the belief that this is determined by connections and contacts is weakening. 

However, it should be stressed that unemployment in Poland is falling, including the youth unemployment rate. The situation in the labour market in Poland is improving but not for all categories of young people. 

Segmentation of the labour market, covering some categories of young people, is still ongoing. Persons with low qualifications or living in economically underdeveloped areas continue to have problems obtaining stable employment contracts, and receive low wages in low-satisfaction jobs. Difficulties with the work/life balance also continue to exist for those with young children, which particularly limits the professional activity of women. Disabled school graduates face problems with entry into the labour market, even after they have received a higher education diploma. There is still an unfavourable institutional environment for setting up one’s own businesses, despite the announced changes. 

A worrying phenomenon is the increase in the category of young people with various deficits that remain outside the labour market. These include young people from poor families, multiple children families, incomplete families, pathological or dysfunctional families with incapable caregivers, children who leave orphanages, foster families, penitentiaries and correctional institutions, young parents, young mothers, persons with low education and qualifications, early school leavers, people with disabilities, and chronically ill people. 

The activities of public institutions in relation to these categories of young people are insufficient and often inaccurate. Various non-governmental organisations (often carrying out unique and highly successful projects) offer their support, but this is limited in scope because of the poor condition, in economic and human resource terms, of this sector in Poland. 

The outbreak of the coronavirus pandemic (Q1 2020) has affected the demand for labour in Poland. So far, in the initial period as a result of the launch of government support programmes for companies and employees, unemployment statistics do not show significant changes. In the following months, the labour market statistics in Poland are also not alarming, despite the persistence of the pandemic. The total unemployment rate registered with labour offices at the end of December 2021 was 5.4 per cent, and the number of unemployed fell to 895,200. According to the Confederation of Employers Lewiatan, the incentive to take up legal work in Poland is the rising salaries, including the raised minimum wage, and the relative ease of obtaining a job due to the reduction of requirements by employers, which is caused by the lack of workers. 

However, the situation of young people, especially under 25 years of age, is no longer so optimistic. The first, preliminary surveys (students  up to 25 years of age March/April 2020) on young people's attitudes to work in the period of the so-called "new normal" brought about by COVID-19 indicate greater interest in the sense of security and stable employment (employment contract as the dominant and desired form of employment). Young people take a closer look at the values declared by companies, which the organisations realised during the period of economic growth, and whose observance is important in times of uncertainty and crisis. In another survey conducted in 2021 (university students and graduates were surveyed) the negative impact of the pandemic on young people's chances in the labour market is evident. Almost half of the respondents (48.7%) assessed that their labour market opportunities had deteriorated due to the pandemic, 32.9% of young people believed that their labour market opportunities were the same as before the COVID-19 pandemic, and only 18.4% declared that the pandemic had made their labour market opportunities better. 

In a survey conducted in 2022, three years after the outbreak of the pandemic, for the first time a majority (64.2%) of college students and graduates gave a positive assessment of their job market prospects. The experience of the pandemic has contributed to an increase in young people's expectations for job flexibility and well-being.  In addition to salary, gaining experience, a sense of meaningful work and flexible working hours are important to students and graduates at work. The young people highly value their well-being, especially mental and social well-being. More than half of them prefer work-life balance to high salaries. "Obligatory" benefit is flexible working hours for 37,2 % of respondents, for 41.5% - the opportunity to work remotely. Employer offers such as a shorter work week and additional days of paid vacation are gaining importance for young people.