Does Polish foreign trade impact employment? Empirical investigation.

Poland noted in the 90s big changes in the structure of its foreign trade turnover. Both export and import values increased in this period. Many observers claim that many jobs in Poland were lost as the result of opening of Polish economy. Undoubtedly “unemployment import” was observed in Poland. But on the other hand slowdown in Polish economy in the recent time proved that decrease of employment was relatively low in the enterprises, which have higher share of export incomes in the total incomes. This situation was observed not only in big companies but also in the most promising firms of SMEs sector. The conclusion that export is suspected to be a job creator in Poland can be drawn. According to the neoclassical Hesksher-Ohlin-Samuelson paradigm, a country characterized by the relative production factor abundance could profit from it and gain higher inflows from trade with products of high labour endowment. Reality of the 1990s supported this assumption as far as Polish export is concerned. Labour abundant products gained high importance in the export basket. There are many manufacturing sectors, which could be classified as labour abundant. The most sparkling example of profitability in export performance is furniture manufacturing. At the end of the 1990s it gained share of 8% in export basket. Additionally this sector is dominated by the firms qualified as SMEs. That is why this sector will be investigated deeply. Our study aims to calculate impact of export growth on the employment level changes in the furniture sector. The paper will be organized as follows: first chapter will be dedicated to review theoretical framework of links between foreign trade and labour market performance. Second chapter will show briefly changes in the structure of Polish foreign trade in the 1990s. The third chapter will be a short overview of labour market performance in the 1990s. In the last chapter the results from the investigation from the macro- and micro- level will be presented. In order to complete empirical part of the paper macroeconomic data will be used. As the attempt to investigate firm level data is rather rare, such a trial will be very useful for conclusions of our paper