Impact of Cyclical Factors on Unemployment

The article analyses the issue of flows between employment and unemployment over the business cycle in Poland. Relationships were examined between the reference cycle, measured by real production and the number of newly registered unemployed persons and persons removed from unemployment rolls who received jobs. A decomposition procedure was applied to data in order to separate cyclical fluctuations, seen as a deviation from trend. Correlation and regression analyses were carried out next. It was found that the outflow from unemployment to employment was a procyclical variable, increasing in upswing phases of the business cycle, and declining in its downswing phases. At the same time, that variable precedes the reference cycle, which suggests labour market activity of enterprises established over the business cycle. On the other hand, flows of registered unemployed persons do not present an unequivocal pattern over the business cycle. This allows to suspect that firms tend to hoard labour in a recession