The labor market in Poland, 2000−2021

AUTHOR’S MAIN MESSAGE The Polish labor market appears to be in very good shape: the employment rate is historically high, and the unemployment rate has dropped to a record low level. Since the mid-2000s, wage growth has accelerated, and wage inequality has declined, supported by the rising minimum wage. However, labor force participation at older ages remains low, and the rapidly aging population will further reduce labor supply. Since 2014, large immigration inflows have reduced labor shortages, but mainly in low-skilled jobs. The lack of migration and integration policy hinders matching migrant workers with jobs. ELEVATOR PITCH In the early 2000s, Poland’s unemployment rate reached 20%. That is now a distant memory, as employment has increased noticeably and the unemployment rate had dropped to 3.4% in 2021. The labor force participation of older workers increased following reforms aimed at prolonging careers. However, participation remains low compared to most developed countries and the reversal of the statutory retirement age in 2017 leaves Poland vulnerable to the effects of population aging. Rising immigration has eased the resulting labor shortages, but women, people with disabilities, and agricultural workers remain underemployed. During the Covid-19 pandemic the slowdown in economic growth and increase in unemployment were small. KEY FINDINGS