While GDP performance in Poland was exceptional, the performance of the Polish labour markets has been less satisfactory. This chapter discusses the institutional arrangement behind setting labour market policies in Poland. We build narratives concerning the evolution of three major labour market policies: active employment policies, social insurance and employer-employee relations. We ask three questions: (i) how have active labour market policies been assisting to combat unemployment; (ii) how have social security reforms been assisting in easing the consequences of demographic transition; and (iii) how have gender equality policies contributed to alleviating the situation of women? We thus portray the evolution of three main labour market policies. We show how these policies fell short of reaching the full potential for transforming the Polish labour market from a centrally planned fiasco into a modern and functionally inclusive environment.
Published version
Working time flexibility and inequality
Badania porównawcze ujawniają dwie uderzające własności nierówności na rynku pracy: nierówności występują praktycznie wszędzie i zmieniają się bardzo powoli. Gdy uwzględni się te różnice, a płace nadal pozostają nierówne, rodzi się potrzeba zrozumienia natury tego zjawiska. Jedno z potencjalnych wyjaśnień zaproponowała Claudia Goldin: na niektórych stanowiskach wymagana jest znaczna doza dyspozycyjności. Pracownicy, którzy z różnych względów nie są w stanie sprostać temu oczekiwaniu (np. pełnienie funkcji opiekuńczych, uczestniczenie w edukacji) uzyskują niższe wynagrodzenie, niż pozostali. Czy nierówności na rynku pracy można wytłumaczyć rozbieżnościami pomiędzy wymogiem dyspozycyjności po stronie pracodawcy i zdolnością do bycia dyspozycyjnym po stronie pracownika?
With Claudia Goldin's presidential address, a new literature flourishes on the role played by time endowments in determining wage inequality.There appear to be higher rewards to working long hours, but also from rewards to working specific hours. An indirect effect of such pattern is that workers will sort into different jobs not only according to their productivity, but also due to their expected time availability. Expecting greater time constraints some workers might sort into occupations that provide lower returns to working long hours, at the expense of lower wages.
We want to take seriously Claudia Goldin's conjecture, that unequal wages are due to working hours frictions, rather than due to pure discrimination.
Goldin (2014, AER) argues that societies have made a remarkable progress in closing the wage and employment gaps in the last fifty years; yet, they have failed to achieve full labor market equality. Goldin boils down the remaining difference to the concept of time flexibility, which should be understood both from employee and the employer perspectives. For example, primary care givers have lower time endowment to allocate to market work. By the same token, groups disadvantaged due to remote location, disability etc. may be at disadvantage when compared to workers without such handicaps. While the conjecture of Goldin is attractive, empirical evidence is scarce and at times contradictory. In this project, we provide a battery of tests Goldin’s conjecture, analyzing the role of working time flexibility in determining wages and employment.
First, from an employee perspective, we hypothesize that demand for flexibility varies at different stages of the life-cycle. If the demand for flexibility indeed drives the (adjusted) wage gaps, then one expect a life-cycle pattern in adjusted wage gaps. In the absence of flexible arrangements, the demand for flexibility might also be reflected in more selective employment patterns. This hypothesis will be tested empirically, with the use of a novel proposed estimation method, which allows to isolate age, cohort and time effects in adjusted wage gaps. The study will be done for a wide variety of countries. Second, also taking the employee perspective, we will infer the true value of working time flexibility to workers. Non-standard work arrangements allow to engage in other spheres of life, but in many societies carry a social stigma. We will propose a large-scale framed field experiment to infer the true value of working time flexibility among workers, controlling for their outside options and household situation.
Third, from an employer perspective, we formulate the hypothesis that managers from a disadvantaged group will not tolerate high wage penalty on time inflexibility among their subordinates. To this end, we will develop and utilize a novel dataset on female managers across Europe and industry-level adjusted gender wage gaps (as well as their between firm dispersion). We will provide a variety of identification strategies to inspect the causality in this relationship.
Fourth, from a household perspective, taxes and social transfers may disproportionally tax the second earner’s labor supply, thus making it disadvantageous to supply labor. So may the childcare costs. We will extend a standard tax-benefit microsimulation model to account for the latter for a selection of the European countries, thus obtaining a shadow price of working time flexibility across countries. Finally, fifth, we will analyze the links between the supply of flexible work agreements and labor market inequality. We will explore ways flexible working arrangements influence labor market inequality across the EU, including selective patterns of employment, changes in within gender inequality and assortative mating.
The project contributes to the literature in three respects. First, we provide a wide battery of tests to an important hypothesis concerning the origins of labor market inequality in a wide, comparative context across countries. Second, we provide several methodological innovations (concerning estimation techniques and identification strategies) as well as methodological diversity (econometrics, simulations and experiments). Third, we will separate the role of the supply side factors (on the side of the employers) from demand side factors (the working time flexibility to combine personal and professional life).
The benefits of international cooperation are threefold. First, the teams complement each other in terms of skills, which permits pushing the frontier of research. Second, given the international composition of the team, the comparative economics angle can be based on local expertise on top of being data driven. Third, the capacity building for both partners will permit broader reach of this and future research in the field, thus contributing to the internationalization of Polish and Lithuanian science in our field.
Inequality-aware market design
Inequality-aware Market Design—an ERC Starting Grant funded by the European Commission—provides a novel way to address the growing problem of inequality in market-design settings. The redistributive objective distinguishes this theory from the traditional mechanism-design literature that has focused predominantly on efficiency and revenue as design goals; the focus on optimal allocation rules in a single marketplace complements the public-finance approach to redistribution through the tax system. IMD provides policy guidance by explaining whether and how policymakers concerned about inequality should resort to distortionary market interventions.
Policymakers often introduce rules constraining transactions in individual markets—such as rent control—or even choose to distribute scarce resources by circumventing markets completely, as is frequently the case for health care or transit. Yet, traditional economic intuition opposes these sorts of policies because—unlike well-functioning markets—they introduce allocative inefficiency.
In this project, we explore the optimal design of marketplaces in the presence of underlying inequalities between participants, developing a theory of Inequality-aware Market Design (IMD). The approach is to deploy a mechanism-design framework that identifies the optimal way to structure the market. In the baseline framework, the designer maximizes a welfare function whose welfare weights reflect her redistributive preferences induced by the inequalities between participants. Market participants may have private information both about their willingness to trade and their welfare weights.
Research focuses on testing the validity and scope of the main hypothesis: When inequalities are sufficiently pronounced and can be detected based on agents’ behavior in the market, it becomes optimal to sacrifice allocative efficiency to achieve a more desirable split of surplus. For example, as shown in our first paper on the topic (Dworczak ® Akbarpour ® Kominers, 2021), optimal market designs may involve inefficient rationing.
This work was supported by the ERC Starting grant IMD-101040122 "Inequality-Aware Market Design". Views and opinions expressed are those of the author only and do not necessarily reflect those of the European Union or the European Research Council. Neither the European Union nor the granting authority can be held responsible for them.
General audience communications:
IMD provides policy guidance by explaining whether and how policymakers concerned about inequality should resort to distortionary market interventions.
The IMD project has two key objectives. The first and leading objective is to develop a comprehensive theory of Inequality-aware Market Design (IMD). We will study the question of optimal redistribution in the framework of mechanism design. This approach marries the equity-efficiency trade-off (extensively analyzed in the public-finance literature) with the focus on the design of a single marketplace in the tradition of market and mechanism design. The optimal redistribution question is posed by assuming that the designer's objective function includes social welfare weights that can depend on agents' observed and unobserved characteristics. The social welfare weights allow the designer to account for the consequences of inequalities between market participants; their inclusion sets the framework apart from the traditional mechanism-design analysis which has been, with notable exceptions discussed below, oblivious to these inherent inequalities.
The second, complementary objective is to establish IMD as an emerging field within economic theory by actively building the research community, promoting its importance, and creating links to neighboring research areas. On top of developing the theory, we will engage in activities aimed at establishing IMD as a new area within economic theory, with strong connections to existing research communities. The strategy to achieve this objective consists of two sets of activities, derived naturally from the fact that IMD lies at the intersection of two fields, mechanism design and public finance.
IMD Days bring together researchers and students interested in understanding the role of markets and policy in addressing the problem of inequality. The goal of the workshop is to create bridges between fields (economic theory, public finance, welfare economics, applied microeconomics) and discuss different perspectives and approaches (theoretical and empirical). IMD Days will feature a few longer talks in a “summer school style” as well as shorter “conference style” talks. The program will create ample opportunities for long conversations and networking.
For more information, please visit IMD Days 2025 webpage.
