Jobless growth: a new challenge for the transition economy of Poland

Purpose – To explain the sources of jobless growth in Poland, the country undergoing economic system transition and integration with the European Union (EU). Design/methodology/approach – The research used the Harrod-Domar model together with an interpretation proposed by Barro and Sala-i-Martin to determine the growth threshold level of jobless growth in Poland. The technical, econometric calculation does not dominate the paper, which is destined for both academic and non-academic readers studying the phenomenon of jobless growth. Findings – The paper provides a review of literature and theories of jobless growth. The calculations show that Poland has a high threshold of jobless growth. The Polish GDP needs to grow at least 4 per cent to add new jobs. Research limitations/implications – To evaluate the overall long run impact of labor productivity on the job market one needs to include the growth of non-manufacturing jobs in the service sectors which accommodate the needs of more affluent worker/consumers. This long-term analysis is outside the scope of the paper. Practical implications – The authors calculated an important variable for the Polish economy, i.e. the threshold growth rate of jobless growth, which indicates a minimum rate of growth, needed to create a net demand for labor. This research is likely to be quoted by the economists studying sources of unemployment in Poland and as well as in any high growth economies. Originality/value – It is the only research known to the authors attempting to explain high level of unemployment in transition economies using recognized economic theories. The paper contributes to a better understanding of the phenomenon of jobless growth in market economies in general.Jobs, Poland, Productivity rate, Transition management, Unemployment