Activation and public employment services in Poland : enhancing labor market policies for the out-of-work population

 1 Activation and Public Employment Services in Poland ENHANCING LABOR MARKET POLICIES FOR THE OUT-OF-WORK POPULATION Social Protection and Labor Global Practice March 2016 1  2 Activation and Public Employment Services in Poland Acknowledgments: This note was prepared through the collaborative effort of a team led by Matteo Morgandi and Roberta Gatti, and including Tomas Damerau (Expenditure Benchmarking and Program Analysis), Lisa Oberlander (Labor Market Profiling) and Karolina Goraus (Institutional Analysis and Labor Market Analysis). Artan Loxha prepared a background note on monitoring and evaluation systems in Europe. Doren Triebe provided research assistance inputs and Isadora Nouel provided administrative support. Carmen De Paz professionally edited the note. We are grateful to the Ministry of Family, Labor, and Social Policy for valuable inputs and discussions, in particular we would like to thank the Directorate and specialists from the Department of Labor Market who participated to the consultation workshop in the Ministry. We also thank Indhira Santos and Ramya Sundaram for useful comments. Disclaimer: This analytical note was prepared between January 2013 and May 2015, using the most recent data available until the time when this report was completed. This includes the LFS 2013, as well as EUROSTAT data for 2012 on EU-wide expenditures in social and labor programs. Some changes in activation policies took place in May 2014, that this report documents and discusses, but which the analytical data is not able to capture. 2 3 3  4 Activation and Public Employment Services in Poland Table of contents Activation and Public Employment Services in Poland ............................................................ 1 Enhancing Labor Market Policies for the Out of Work Population ........................................... 1 Table of contents................................................................................................................... 4 Overview............................................................................................................................... 5 1. Introduction .................................................................................................................... 12 2. Macroeconomic, social and labor market context ............................................................ 14 3. A profile of Poland’s out-of-work population ................................................................... 19 3.1. Introduction .......................................................................................................................... 19 3.2. The out-of-work population in Poland .................................................................................... 21 3.3. Use of public employment services among out-of-work individuals......................................... 24 4. Social benefits and labor market participation ................................................................. 30 4.1 Labor market profile of social benefit recipients ...................................................................... 30 4.2 Incentive compatibility of social benefits ................................................................................. 33 5. Active Labor Market Policies and Public Employment Services ......................................... 37 5.1 The institutional structure of Public Employment Services in Poland ........................................ 37 5.2 Expenditures on labor market policies in Poland...................................................................... 40 5.3 Active Labor Market Programs in Polish PES: expenditures and composition ............................ 44 6. Typologies of PES clients and tailored reforms................................................................. 50 7. Cross cutting recommendations ................................................................................................ 64 Annex 1: Probit model of job search behavior ...................................................................... 70 Annex 2: Behavioral requirements and benefit sanctions in selected EU and OECD countries, and the Western Balkan countries ....................................................................................... 71 Annex 3: LCA – analysis results ............................................................................................ 79 Annex 4: LCA – Probit “Having a job