Against a backdrop of robust economic growth over the past two decades, economic participation in Poland has risen. By 2019, rates of economic inactivity – the share of the working-age population not in the labour market – as well as rates of unemployment and long-term unemployment, had dropped to historic lows.

However, these positive labour market developments mask two important trends. Despite its rapid economic growth, Poland’s economic inactivity rate remains above the OECD average, putting pressure on public finances. In addition, whilst labour force participation has improved, it is geographically uneven. Many Polish regions are far behind the national average, reflecting in part structural differences at the territorial level, ranging from historically strong dependencies on the declining agricultural sector to spatial differences in foreign investment.

This OECD report sheds light on the drivers of economic inactivity across Polish regions and analyses them in light of both individual and structural factors associated with labour force participation. It highlights the stark regional differences and the need for more inclusive active labour market policies to help integrate the economically inactive into Poland’s labour force. A better integration of services provided by national and local institutions, as well as a strengthened role of the social economy, is essential to address the complex needs of economically inactive persons.

The report is part of the Programme of Work of the OECD Local Employment and Economic Development (LEED) Programme. Created in 1982, the LEED Programme aims to contribute to the creation of more and better jobs for more productive and inclusive economies. It produces guidance to make the implementation of national policies more effective at the local level, while stimulating innovative practices on the ground. The OECD LEED Directing Committee, which gathers governments of OECD member and non-member countries, oversees the work of the LEED Programme. This report was approved by written procedure by the OECD LEED Directing Committee on 15 October 2021.

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