Regional Economic Inactivity Trends in Poland

Report

OECD Reviews on Local Job Creation

21 October 2021

4. Re-designing policies to support vulnerable groups and drive recovery

Abstract

This chapter analyses public policies addressed to the economically inactive. The first part takes a close look at institutions in Poland that provide support to the unemployed and the economically inactive, the public employment services (4.2.) and social assistance (4.3.). The second part analyses the role of actors outside these main governmental service providers, with a particular focus on the social economy (4.4.). The final part then addresses local public policies targeted at key groups of economically inactive people: people with disabilities, older people of working age and women (4.5.).

In Brief

There is no policy in Poland directly aimed at re-activating the economically inactive and the category as a target group has appeared only in recent years in programmes financed by the European Social Fund (ESF). As a result, there is a lack of comprehensive public policies addressed to the economically inactive, while undertaken actions are not always sufficiently coordinated between the different governmental actors involved. Public employment services (PES) primarily target the unemployed. Among these, PES mainly work with unemployed who are motivated and active in their job search, striving to maximize employment and cost effectiveness indicators. Instrumets tailored towards working with unemployed in more precarious situations could therefore be expanded.
The economically inactive therefore rely on the support from local social assistance institutions, which primarily provide benefit payments. This stands in stark contrast to the needs of the economically inactive to successfully (re)integrate into the labour market. For those outside the labour force, comprehensive support measures are required that include a combination of professional and social integration support. Lacking such targeted support, economically inactive people find themselves falling throught the institutional cracks between PES and social integration assistance.
In response to these challenges, the social economy could play an important role across Polish regions. Attempts to create institutions combining the functions of employment and social assistance services such as social employment units, social integration centres and social integration clubs have existed in Poland for years. However, there are relatively few of them, the scale of operation is marginal, and they are unevenly distributed across Polish regions. In most cases, the availability of their services is subordinated to specific project cycles and coordination with other forms of assistance is often lacking. For over 10 years, European Funds have been investing heavily in the development of the social economy in Poland, supporting the creation and development of social enterprises, primarily in the form of social cooperatives. However, the scale of this sector is still insufficient to address the volume of needs to integrate the economically inactive. The 2021 draft act on the social economy, which aims to accelerate the development of this sector is promising.
Policy action will need to be targeted to the drivers of economic inactivity by demographic group (e.g., people with disabilities, older people of working age and women). While each group shows disproportionally high economic inactivity rates compared to working-age men, the reasons for their lack of labour force participation are fundamentally different. Approximately 70% of working-age people with disabilities are economically inactive. However, the vast majority of funds addressing the issue supports already active persons with disabilities. Thus, economically inactive persons with disability lack structured support. The pension system and the relatively low retirement age in Poland currently shape low economic activity among older people of working age. New cohorts of older people of working age are increasingly better educated and in better health condition, and therefore remain active in the labour market for longer. Lifelong learning programmes to facilitiate continued labour market participation of older persons are currently underdeveloped. Business opening hours, insufficient childcare, inflexible and long working hours, and low wages discourage women’s employment in Poland.

4.1. Introduction

Economically inactive people are a largely untapped resource and a cost for public finances, calling for targeted support adapted to the needs of different demographics in different types of regions. This chapter analyses the institutional landscape in Poland, with a specific focus on the support economically inactive receive and where bottlenecks occur—particularly across levels of government. Section 4.2 analyses the role of public employment services (PES). Sections 4.3 and 4.4 discuss the role of institutions and the social economy, including non-governmental organisations (NGOs) outside the PES, that support the re-integration of the economically inactive into the labour force. Section 4.5 then addresses specific active labour market policies.

4.2. Public employment services: what role for economically inactive people?

4.2.1. Unemployed persons who still report they are looking for work are the main service recipients of public employment services

Public employment services are the main delivery service for active labour market policy in Poland. Although other labour market institutions such as non-governmental organisations and private employment agencies exist, PES provide services to the majority of the jobless in Poland. Public employment services act at three independent levels (OECD, 2020, p. 5[1])

National: Ministry of Development, Labour and Technology, responsible for setting the regulatory framework, managing the Labour Fund, and financing active labour market policies;
Regional: Voivodeship employment offices, responsible for regional strategies on the labour market, regional analyses and selected services for specific groups, such as career support services for youth (OECD, 2016[2]);
Local: County employment offices, responsible for delivering services to employers and job seekers. This includes providing benefits to eligible unemployed and the implementation of active labour market policies.

PES in Poland are regulated by the Law on promotion of employment and labour market institutions (Government of Poland, 2004[3]). The Polish government passed the Law in 2004, when the situation in the labour market varied significantly relative to 2021, with much higher rates of unemployment. As defined in the Law, an unemployed person is one who is:

Registered in the local labour office;
Aged between 18 and 60 for women and between 18 and 65 for men;
Not employed and not performing any other gainful work;
Capable and ready to take up full-time work, or if the person is disabled, capable and ready to take up employment for at least half of potential working time;
Not in school.

To further be entitled to unemployment benefits, the unemployed individual must have been employed for 12 months over the most recent 18 months period.

The Law, however, also defines another category of clients for public employment services: the jobseeker. The criteria for registration as a jobseeker are much less strict than for the unemployed. As defined in the Law, a jobseeker is a person registered with the local employment office, seeking employment, other gainful work or other forms of social assistance. In practice, almost anyone can register as a jobseeker. In November 2020, local employment offices registered 26 000 jobseekers, or 2.5% of all persons registered in local employment offices. This proportion has been stable for years. Jobseekers are therefore a small share of PES service recipients.1

The group of jobseekers tends to be more detached from the labour market, and includes a high proportion of persons with disabilities. Compared to those defined as unemployed, they often have socio-economic profiles closer to people who are economically inactive due to being discouraged to search for work or long-term unemployment.

Jobseekers can use job search instruments offered by local employment offices. Jobseekers use mostly three PES instruments: training, counselling, and internships. In 2019, jobseekers used these tools much less frequently than the unemployed (Figure 4.1). Around 1.4% of the unemployed participated, compared to 0.6% for jobseekers. Around 3.9% of the unemployed undertook internships through PES, compared to 1.1% of jobseekers. This difference is even greater for those who received job counselling, where 8.7% of unemployed persons took part, compared to 1.8% of jobseekers.

Services provided by PES are also less likely to lead to employment for jobseekers relative to the unemployed. Effectiveness, measured as employment three months after completing the service, is significantly lower for jobseekers. After three months, 73.7%, 86.2% and 46.7% of the unemployed who participated in training, internships and counselling, respectively, were employed, compared to 8.1%, 17.8% and 8.9% of jobseekers who had completed the same activities (Figure 4.2). Not considering subsidized employment, the effectiveness of these policies on the labour market integration of jobseekers is lower. Training and counselling, in particular, resulted in 40.9% and 15.2% job placements respectively for the unemployed, compared to just 3.2% and 1.6% of jobseekers (Figure 4.3).

Figure 4.1. Jobseekers revert to PES services less often compared to the unemployed

Figure 4.2. PES services are less effective at helping jobseekers find work compared to unemployed persons

Figure 4.3. The success rate outside subsidised employment is lower for training and counselling among jobseekers

The relatively lower effectiveness of labour market instruments for jobseekers relative to the registered unemployed may result from several factors. Jobseekers are likely in more difficult situations in the labour market compared to unemployed persons, especially as 35% of the jobseeker pool are people with disabilities. Jobseekers may also be less pressed to search for work, as a share of this pool may have other sources of income. Another reason may be linked to PES services, as local employment offices put less effort into facilitating the employment of jobseekers, considering the greater number of obstacles jobseekers face to get ready for the labour market.

4.2.2. People registered in employment offices are not considered economically inactive in Poland, but often are inactive

The Public Employment Services (PES) formally distinguishes between persons who are unemployed or seeking work, and those who are economically inactive and fall outside of PES services. However, registration in local employment offices is one of the conditions for getting access to public health services for the unemployed. Therefore, a fraction of the registered unemployed are likely not actively looking for employment in practice (OECD, 2016[2]). Some parts of the registered unemployed may be working in the informal economy or may not be ready to take up employment.

There is little up to date research on the scale of inactive persons among the registered unemployed, but exisiting evidence suggests that a significant fraction of the registered unemployed is indeed inactive. In 2015, the Social Diagnosis study identified that 57% of all registered unemployed persons were actually working in the informal economy or were economically inactive (Czapiński and Panek, 2015[4]). Compared to previous waves of the study, the share belonging to this group has grown. This is a result of the stable number of individuals active in the informal economy and the decreasing number of total unemployed. However, the exisiting evidence from the Social Diagnosis study suggests that among the registered unemployed, there is likely to be a significant fraction of persons who should be considered inactive.

In 2014, the Polish government introduced a reform of PES with a finer mechanism to profile those registered as unemployed, which was withdrawn in 2019. The main assumption of this former mechanism was that the appropriate targeting of assistance to the unemployed should improve the quality of services provided to them, its relevance and effectiveness. After the reform, all unemployed persons were divided into three groups, corresponding to three profiles of assistance:

Profile I were persons in a relatively better labour market situation, well prepared to enter the labour market. The assumption was that this group requires only job matching assistance;
Profile II were persons who need additional support to acquire decent employment, including the acquisition of skills, professional experience and some guidance;
Profile III were persons who are in the the most difficult situation on the labour market, and were considered detached from the labour market.

At the time of the 2014 reform, it was decided that PES should focus on persons from the first two groups, while persons from the third group should be supported by NGOs or social assistance centres. In practice, however, the profiling mechanisms tended to weigh against people in the most difficult situations. People of profile III did not receive assistance from employment offices, which focused on individuals categorised as profile II. At the same time, social welfare centres and NGOs did not receive adequate funding to support this group from profile III (Najwyższa Izba Kontroli (NIK), 2018[5]; Hermann-Pawłowska and Stronkowski, 2016[6]). The profiling mechanism was also widely criticized by PES employees, who pointed out its lack of flexibility to respond to individual needs of the unemployed (Flaszyńska, 2020[7]). Paired with legal concerns raised by the Constitutional Tribunal in 2018, the profiling mechanism was withdrawn in 2019.

The profiling mechanism, however, revealed that those “tagged” as profile III showed the greatest level of exclusion from the labour market. A large number of persons categorised as profile III, despite being registered in the employment office, were in practice not ready to work and were not actively looking for a job. Information on the number of persons categorised as profile III can therefore be used as an indication of the number of economically inactive people registered with employment offices as unemployed. At the end of 2018, unemployed persons assigned to profile III accounted for 35% of all registered unemployed, of which 39% were women and 30% were men (Figure 4.4). This share grew from 29% in 2015 to 35% in 2018, as the labour market situation improved. The number of persons assigned to “profile III” had decreased at a slower rate than the share of other groups of unemployed.

Figure 4.4. The share of former “profile III” unemployed has been growing as a relative share of unemployed persons in Poland

4.2.3. Local PES offices struggle to support the most disadvantaged unemployed persons

PES offices were not prepared to support those formerly labelled “profile III”. For this reason, a reformed regulation redirected this group to “Programmes of Active Integration”, implemented by social welfare centres or NGOs. Social assistance centres, however, rarely implemented the new instrument. This was mainly due to insufficient human and financial resources for the implementation of these tasks, as well as the focus of social assistance centres on their own statutory tasks. Employment offices could also commission non-governmental organisations to implement programmes for the profile III group. However, they rarely made use of this option, an indication of the low levels of cooperation among the various institutions at the local level.

As a result, only a small fraction of unemployed persons assigned to profile III received support. The case of the profiling mechanism reveals that local employment offices focus most of their work on the unemployed in relatively advantageous labour market situations, who are able to find work with the support of standard programmes.

Persons belonging to groups in more difficult situations, or former “profile III”, are in many cases underrepresented among participants of labour market policy instruments. The Law on the promotion of employment and labour market institutions defines several categories of the unemployed who are considered to be in a particularly difficult situation on the labour market (e.g. long-term unemployed, people over 50, unemployed using social welfare benefits, people with disabilities registered as unemployed and youth) (Government of Poland, 2004[3]). However, data shows that, with the exception of youth, these groups are underrepresented in labour market measures. Younger unemployed persons have much better chances to participate in the most effective labour market measures, such as training, internships or subsidised employment, compared to the long-term unemployed or unemployed persons over the age of 50 (Figure 4.5). Unemployed in more difficult situations participate in public works or socially beneficial works in relatively larger shares. These instruments, however, are less effective measures to integrate persons into the open labour market.

Figure 4.5. Younger unemployed persons participate to a greater extent in PES programmes

PES offices may be inclined to target their programmes to those unemployed persons who are most prepared and most motivated to find employment. Within the PES system, three factors may drive this inequality between unemployed persons.

Funding incentives for local PES offices may put the most excluded at a disadvantage

By evaluating the cost-effectiveness and success rates of finding employment for registered unemployed, funding mechanisms encourage PES offices to focus on those most ready to work. Data on the effectiveness of each local employment office is published every year by the Ministry of Development, Technology and Labour. Between 2015 and 2017, the Ministry distributed financial resources to local employment offices based on data on the labour market insertion of those unemployed. The evaluation is based on only two indicators: employment effectiveness and cost-effectiveness. These indicators are not differentiated by target groups such as youth, people with disabilities or older adults, so the evaluation metrics act as an incentive for local employment offices to focus on groups most ready for employment and requiring less investment.

Standard active labour market programmes do not offer the labour market insertion assistance needed by those most detached from the labour market

The organisation and way in which PES works is standardised. Little individualised support is offered. Employment offices are prepared to work with a large number of unemployed persons who have standard difficulties in finding a job, such as the lack of skills or lack of professional experience. They also offer standard labour market services and instruments. There is relatively little room for an individualised approach to clients at local employment offices. PES representatives highlight that this situation has become worse after the 2014 reform of the operation of employment offices. The emphasis put on individualised career counselling has declined since the 2014 reform. This was a side effect of introducing a new function in employment offices: a client advisor. Career counsellors have become client advisers. As the employees of labour offices noted in interviews, as a result of this change, career counselors could spend less time on individual career counseling.

In practice, routine work with persons registered in the local employment office who have the profile of an economically inactive person is frequently limited to monthly meetings where the individual is asked to confirm his or her readiness to work. Meetings for this group tend to constitute a bureaucratic formality, with limited impact on the activation of unemployed persons (Wojewódzki Urząd Pracy w Krakowie, 2010[8]). As a result, employment offices typically do not actively support the unemployed most excluded from the labour market.

The attitude of many PES staff tends to favour “job-ready” people

Staff from local and regional PES in Poland tend to recognise that their preference is not to work with those most excluded from the labour market. Some members of staff reveal they would prefer not to link health insurance with PES registration to allow them to work only with those unemployed who are most prepared to enter the job market.2

Self-selection of the “job ready” unemployed into active labour market programmes may partly explain this dynamic. Higher motivation to participate in active labour market programmes may in itself serve as a partial explanation for higher participation rates in activation programmes among those prepared to work. Similarly, the unemployed most detached from the labour market may be less motivated to participate if they anticipate not to be sucessful.

A pilot project from the Podkarpacia and Swietokrzyskie voivodeships is seeking to explore the challenges of those most excluded from the labour market. Six counties entered this pilot with the Voivodeship Employment Office from Rzeszów and local enterprises. All counties are located close to Mielec and within its industrial area. The pilot sought to respond to the needs of local enterprises, facing labour shortages. A total of 50 000 unemployed persons were registered in all six local employment offices, though at the same time, the employment offices were unable to fill vacancies, even for low-skill jobs.

The idea of the project was to address the complex problems of long-term unemployed persons, who were registered as unemployed but were in fact not actually seeking work and therefore economically inactive. According to representatives of public employment offices, it took time to understand that standard activation measures may not suffice to reintegrate economically inactive into the labour market. Representatives of employment offices insisted strongly on focusing on standard activation measures and were sceptical of non-standard PES programmes.3 The pilot continues to develop.

Some employment offices were aware that existing approaches were insufficient, and have tried developing new instruments. One example is the supportive employment coach (trener zatrudnienia wspieranego), developed and tested by the Regional Employment Office in Kraków. This instrument follows a model that exists in many European countries and is based on the assumption that the activation of long-term inactive persons requires, in the first place, long-term intensive coaching. The coaching consists of the following elements:

Assessing the client's potential, his or her social and professional situation, needs and aspirations in order to draw up an accurate estimation of personality predispositions, professional aspirations and development opportunities;
Motivating, analysing and supporting the client's activities as part of a Personal Supported Employment Plan. A coach establishes contacts with employers, employment offices and other labour market institutions to promote Supported Employment and sourcing jobs for specific clients;
After finding a job for an unemployed person, introducing him or her to the company by familiarising them with the procedures and conditions of employment and the specific tasks of the workplace. With some clients, the trainer learns about the responsibilities of his or her client, and then trains them;
Monitoring the person’s adaptation in the workplace on an ongoing basis and helping to solve possible problems, as well as mediating with employers.

In Kraków, this process of coaching lasts about six months, and in the case of persons with disabilities, a minimum of twelve months (Wojewódzki Urząd Pracy w Krakowie, 2010[8]).

The model, however, turned out to be incompatible with the reality of public institutions. From 2011 to 2013, the programme was piloted in 44 labour market institutions, social assistance centres and NGOs in the Lesser Poland voivodeship. However, the pilot experience showed that the model is difficult to implement in public institutions. In employment offices, staff was unprepared to leave their office and work in the field. In social welfare centres, where social workers are used to work in the field, learning professional tasks and then teaching these to clients was a burden to staff. The time it took for the socio-economic reintegration process and its associated high costs made the project unsustainable. Public institutions are focused on efficient and speedy actions that bring quick results. The several months needed for the activation process turned out to be an obstacle. As a result, none of the employment offices participating in the pilot programme still apply the methods tested in the pilot. However, the model was almost fully adopted by some non-governmental organisations.

Box 4.1. NGOs could start to play a more important role in the economic activation of those currently not part of the labour force

Experts participating in a workshop conducted in the development phase of this report emphasized that public employment services often struggle to reach the economically inactive and provide individualized support. One solution proposed was the commissioning of social and professional activation of economically inactive people to non-governmental organizations or other social economy actors with extensive experience in the area. Going forward, it will be important to define the terms of cooperation between government and these social economy actors. It was stressed that long-term, output oriented contracts of employment services with NGOs (or other private companies) could provide a working model suitable to both parties. However, further stakeholder dialogues that discuss details on terms and conditions as well as success metrics will be necessary.

A planned reform aims to strengthen the activities of public employment services in favour of the economically inactive. As of June 2021, the Ministry of Development, Labour and Technology is working on a reform of public employment services. The main assumption of the planned reform were presented in the National Program of Recovery. One of the key elements of the planned reform is to separate health insurance (i.e. in practice, access to health services) from registration at the employment office. It is assumed that this solution should free the resources of public employment services, which would allow public employment services to shift their focus to those unemployed who need more intensive support. The reform further plans to widen the focus of public employment services towards economically inactive people (Ministerstwo Funduszy i Polityki Regionalnej, 2021[9]).

4.3. Institutions supporting economically inactive people in Poland outside of PES

The Public Employment Service devotes limited resources to the unemployed most excluded from the labour market, and does not tailor its services to those economically inactive. Other institutions in Poland, however, have taken the lead in helping those who are economically inactive. These institutions are described below.

4.3.1. Voluntary Labour Corps

The Voluntary Labour Corps (VLC) is a public organisation supervised by the ministry responsible for the labour market. In reality, it operates at the interface between labour market institutions and the education system. The target group is young people, especially the disadvantaged. Participants in Labour Corps services tend to have the following characteristics:

experienced delays in education;
originate from small towns;
are from large families, with parents having lower levels of education;
experienced dysfunctions in their families;
have difficult personal circumstances;
experienced difficulties with law enforcement.

These individuals are not always inactive, but at risk of becoming economically inactivite. The Volunteer Labour Corps directs its activities to:

Adolescents (15-17 years old) who have not completed compulsory education, have problems graduating and need professional qualifications, and;
People aged 18-25, including people who are looking for a job or want retraining, unemployed, school graduates and students.

Adolescents can receive support in VLC facilities. Education is combined with vocational preparation, which can take place in enterprises or VLC workshops. Students also receive pedagogical and psychological support, as well as social assistance. The institution yields positive results: every year 85% of students finish their education or are promoted to the next class, and 90% of those who finish pass the external vocational exams.

VLC also operates as a labour market institution. They provide services under the label “professional development”, consisting of career counselling, job placement and psychological support. These services are provided for participants of Voluntary Labour Corps and its graduates.

4.3.2. Social assistance

Social assistance plays an important role in helping those who are economically inactive. It can be assumed that a significant share of inactive persons in Poland has or had contact with social assistance. Social assistance in Poland is determined by the Law on Social Assistance, adopted in 2004 (Box 4.2).

Box 4.2. The 2004 Law on Social Assistance regulates Poland’s social assistance system

In Poland, social assistance operates across communities, municipalities and regions

Social assistance operates at three levels of local government administration: community, county and voivodeship. At the community level, social assistance centres play the main role, providing most forms of financial support to people in difficult situations. At the county level, County Centres of Family Support provide more specialised support in the areas of foster care, disability and other specific issues. At the voivodeship level, Regional Centres of Social Policy have a more strategic and coordination role.

Source: (Government of Poland, 2004[10])

In 2019, 6% of the population lived in families supported by social assistance. This percentage was the highest in Warmian-Masuria and lowest in the voivodeship of Silesia. Around 32% of recipients of social assistance indicated unemployment as the main reason for accessing social assistance (Ministerstwo Rodziny, Pracy i Polityki Społecznej, 2020[11]). Thus, the remaining 68% of those receiving social assistance are economically inactive, although a significant proportion of this group are children and the elderly. Unemployment is the second main reason for receiving support, after poverty, indicating that there is significant overlap between the use of employment and social assistance services (OECD, 2016[2])

On the regional level, however, this pattern can vary. In regions with poor labour market situations, unemployment tends to be a greater or equally significant reason for receiving social assistance. For example in Podkarpacia, 2.8% of the population declared unemployment as the main reason for requesting social assistance, compared to 2.7% for poverty and 2% for disability (Figure 4.6).4 At the national level, 2.4% of the population identified poverty as the main reason for requesting assistance, while 1.9% declared unemployment.

Figure 4.6. Reasons for requesting social assistance vary regionally

The unemployed who receive social assistance are registered in local employment offices. However, according to anecdotal evidence from social assistance employees, the majority of the unemployed who receive social assistance is not actively searching for a job. Some may not be ready or willing to take up just any job (Arendt, Hryniewiecka and Kukulak-Dolata, 2012[12]), while others take up temporary or seasonal work, leaving them unemployed for most of the year. The situation has many causes, ranging from family obligations, lack of access to convenient or public transport, to low or unneeded competences and qualifications, low motivation to find employment, acceptance and adjustment to the situation or substance abuse. Generally, the situation of this group is usually complex and long-lasting. It is usually worse in areas with limited job options or low-paid and low-quality job vacancies.

Social assistance office staff observe that unemployed persons accessing social assistance services have profiles resembling those who are economically inactive. In most cases, standard labour market measures are not sufficient. These persons often need individualised, interdisciplinary, and long-term support. Social assistance in Poland has been torn between redistributive and activating functions. In legal acts and programming documents, the activation function is emphasised, particularly to support people in becoming independent, an important aspect of which is helping them return to the labour force. In practice, however, social assistance typically has insufficient funds to effectively implement the activation function. As a result, it focuses on the redistributive function, or the payment of financial benefits.

Evidence suggests that social workers in Poland struggle to balance their roles as providers of job search assistance and social welfare officials. On the one hand, social workers are prepared for active social work, and on the other hand, in their daily job, they mostly focus on the implementation of the protective function of social assistance. As a result, their identity as social welfare officials, and not as social workers is strengthened (Rymsza, 2011[13]). Social assistance does, however, offer some activation programmes, aimed at improving the independence of service beneficiaries. However, reliable data on the scale and effectiveness of these programmes does not exist. The most important instruments cited during interviews are: the social contract, public benefit works, social employment and projects financed by the European Social Fund. The first two instruments, provided by social assistance centres, are summarised in Box 4.3.

Box 4.3. Active labour market policies provided by social assistance centres are not adapted to the needs of economically inactive people

Social contract

The social contract is regulated in the Law on social assistance. According to the law, it is an “individualised support contract concluded by a social worker with a person applying for assistance, specifying the rights and obligations of the parties to the contract, as part of joint actions aimed at overcoming the difficult life situation of the person or family and to counteract social exclusion”.

The social contract translates the intention of linking the right to social benefits with the obligation to participate in professional activation or social integration programmes. It is assumed here that this type of contract should strengthen the motivation of social welfare beneficiaries to participate in activation programmes and to undertake efforts to become independent, such as by looking for a job or participating in training.

In practice, however, the implementation of social contracts encounters a number of difficulties. Social welfare recipients are reluctant to enter into social contracts. Social assistance workers cite the low motivation for change and difficulties in defining and identifying problems, which often results from low self-awareness of recipients’ needs, as reasons for the low appetite for engaging in social contracts. The social benefits offered by social assistance are also too low to sufficiently motivate beneficiaries.

Moreover, social contracts may be treated by social workers as a way to exert power over recipients, impeding the mutual trust necessary for an effective process of activation. Social contracts suffer from this dynamic, and there is no reliable data on its actual effects (Regionalny Ośrodek Polityki Społecznej w Szczecinie, 2014[14]).

One solution to the problem include projects financed by European Social Fund (ESF). Due to the higher level of funding, the projects make it possible to offer forms of support that are attractive to social welfare recipients, such as driving licence courses. To get access to these courses, project participants must also go through personalised support programmes. These programmes help welfare recipients to better recognise their difficulties and problems, acquire social competences necessary to function in society and the labour market, and acquire professional skills. Labour market insertion is facilitated in this context.

Public benefit works

Another instrument of activation is public benefit works. This instrument lies between labour market policy and social assistance. It is financed by employment offices but organised by social assistance centres. The instrument involves performing simple work for the local community. These jobs are limited to ten hours a week. Public benefit work can be used to build basic social competences needed for professional activation and to maintain professional activity. They are also a source of additional income for participants. However, according to data from employment offices, the effectiveness of this instrument evaluated on its success to find employment for social welfare recipients is relatively low and amounted to only 12% of participants in 2019. The effectiveness was slightly higher for young people, parents and women, while lower for older people of working age and people with disabilities (Ministerstwo Rodziny, Pracy i Polityki Społecznej, 2019[15]) .

Source: Regionalny Ośrodek Polityki Społecznej w Szczecinie (2019), Kontrakt socjalny w praktyce, Szczecin. http://www.ois.wzp.pl/attachments/article/247/Raport_Kontrakt.pdf

Ministerstwo Rodziny, Pracy i Polityki Społecznej (2020), Informacja o bezrobotnych i poszukujących pracy w grudniu 2019 roku [Information on unemployed and jobseekers in December 2019], https://psz.praca.gov.pl/-/11341791-statystyki-strukturalne-grudzien-2019

The main reasons for the low activity of social assistance in the area of professional activation are complex. Tasks performed by social welfare services are regulated by many legal acts, amongst others on social welfare, on supporting the family and foster care, and on counteracting domestic violence. The tasks associated with these acts overlap and intersect. New programs, initiatives or legislation tend to add additional tasks to social assistance services (Miżejewski, 2014[16]).

At the same time, the capacity of social assistance units is insufficient for a growing workload. Representatives of social assistance intitutions underlined during interviews that the shortage of social workers is particuraly noticeable. According to these representatives, this is due, on the one hand, to underinvestment in the functioning of social assistance services, and on the other hand, to the lack of candidates willing to work in social assistance. This work is perceived as not very attractive and poorly paid.

The financing system does not provide any clear incentives to focus on the professional activation of social assistants clients. Currently, social assistance activities are financed from several sources: local governments' own resources, the state budget, government programs, European funds, and private resources. Public statistics separate expenditure on social assistance from the budgets of local governments and the state budget. However, some grants from the state budget are considered as a part of local government budget, not always allowing for a clear distinction of funding sources (Miżejewski, 2014[16]).

The main expenditure of social assistance is aimed at supporting care services for dependents and children, and supporting the family. The expenditure of social assistance is included in three budget chapters (according to the classification of expenditures of public finance): social assistance, other tasks of social assistance and supporting family. The main item of expenditure in the budgets of local governments are child benefits, which in 2019 accounted for 46% of all local government expenditure in these three chapters. Other important items are social housing (7%), childcare facilities for children under 3 (2%), care and educational centers for children and young people (2%), allowances and assistance in kind (2%) (Miżejewski, 2014[16]).

Budgets for economic activation services are limited andaccount for only a small share of social assistance expenditure. The main categories of expenditure by self govement budgets in the chapter social assistance included in 2019: social assistance homes (33% of all expenditures of self goverments in the chapter social assistance), social assistance centres, which included also services provided by social workers, including activation services (21%), permament benefits (7%), support centres (7%) and temporary benefits (7%) (Statistics Poland, 2019[17]).

4.4. The social economy: Including economically inactive people outside of social assistance and PES

In Poland, the social and professional activation of economically inactive people or those at risk of social exclusion is not sufficient to meet demand and is weakly integrated. On the one hand, employment offices focus on the economic activation of the more active unemployed (i.e. the “easier” clients) through professional activation services. These types of services are necessary, but strongly insufficient for inactive or excluded people. On the other hand, social assistance centres focus on providing social support, primarily through income support, and are not well prepared to provide professional activation services. In this context, neither institution is responsible for providing integrated and comprehensive activation services and social support for the economically inactive.

There have been attempts in Poland to respond to these deficits. However, they tended to consist of creating new, additional solutions and instruments, with limited comprehensive reform of the existing system. These instruments play the role of a complementary rather than a comprehensive public service. Within the moderately developed social economy in Poland (OECD, 2020[18]), the most important of these are social employment institutions and social cooperatives.

4.4.1. Social employment

Social employment (zatrudnienie socjalne) is regulated by the Law on social employment, adopted in 2003. Social employment is addressed to disadvantaged groups, persons in difficult situations, such as homelessness, substance abuse, persons with mental disorders, the long-term unemployed, those released from prison, or people with disabilities. Social employment is a part of the social economy sector and offers activities organised in one of two forms:

Social integration centres, and;
Social integration clubs.

Social integration centres offer one-year programmes, providing social and vocational reintegration activities. This is usually in the form of work, in workshops or in enterprises, in order to develop vocational skills, combined with social skills development, psychological support, the support of social workers and career counselling. The instrument provides integrated services, adjusted to the needs of the long-term unemployed, those who are inactive or threatened by social exclusion. Participants also receive an integration benefit of the amount equivalent to unemployment benefits.

The social integration club is a more flexible instrument, often used by social assistance centres.Training in clubs usually focuses more on the development of social competences than vocational education. Participants do not receive any financial benefits.

Both forms of social employment are voluntary. Furthermore, there is no universal mechanism to finance these entities. Therefore, the main problems are rather the limited number of entities, the limited scope of their activities, their uneven territorial distribution and limited financial sustainability. In 2019, 186 social integration centres operated across Poland, spread across almost 2 500 communities. Additionally, there were 260 social integration clubs, although data on the number of their participants is not available.

The scale of activities of social integration centres is very small. In 2019, about 11 000 persons participated in social integration centre activities and 5 000 completed the support programme. Around 40% of these persons became economically independent, which in most cases means that they found employment. Comparing these numbers to the size of the target group reveals the limited reach of the social integration centres. According to 2019 labour force survey data, there was an average of 83 000 long-term unemployed persons and 210 000 economically inactive persons discouraged from their job search. Thus, a total of over 300 000 people are potential participants of social employment entities.

Social employment entities are also unevenly distributed across Poland’s regions. The lowest number of operating entities was present in the voivodeship of Lower Silesia (9) and the highest number in Silesia (65) – two neighbouring voivodeships with a relatively good labour market situation. This shows that the creation of social employment units is not a derivative of needs or regional policy, but likely the initiative of local actors. The number of operating institutions can also be compared to the number of long-term unemployed persons registered with employment offices at the end of 2019. Large discrepancies exist. In the Lubusz voivodeship, there were 338 long-term unemployed persons per one unit, compared to 4 046 in Mazowieckie (Figure 4.7). The large regional gaps in registration of long-term unemployed persons reveals large inequalities in access, but it also reflects different local strategies and capacities.

Figure 4.7. Large discrepancies exist in the access to social employment units of the long-term unemployed

Another challenge is the relatively low level of coordination of the network of services provided by employment offices, social assistance and social employment units at the local level. While examples of successful cooperation in individual cases exist, there are no systemic solutions ensuring the cooperation of various institutions in providing the most optimal services tailored to the needs of people in difficult situations (Szarfenberg, Grewiński and Lizut, 2019[19]).

Szarfenberg et. al. compare the Polish experience with social employment with patterns of social and vocational integration existing in other countries. The main conclusion is that the Polish model goes in the opposite direction compared to reforms in other countries. Most countries move towards a process of integration of activation services. In Poland, complementary institutions are introduced alongside two independent systems that require better coordination. The problem is exacerbated by the fragmentation of activation services networks (Szarfenberg, Grewiński and Lizut, 2019[19]).

4.4.2. Social cooperatives

Social cooperatives have also tried to fill the gap in social and professional activation policies in Poland (Mendell et al., 2009[20]).5 The Act on Social Cooperatives of 2006 states that the goal of social cooperatives is the social and professional reintegration of their members and employees. The development of social cooperatives accelerated after 2010, when they started receiving support from the European Social Fund (ESF). Currently, European funds support not only social cooperatives, but the wider category of social enterprises, which also includes social cooperatives. This support is provided by the nationwide network of social economy support centres (OWES), which help create and develop social enterprises by providing business, training and financial support for job creation for people at risk of social exclusion.

In practice, however, both the support centres and social enterprises themselves are more focused on operating the enterprises and less on the social and professional integration of their employees. Attempts are being made to strengthen the integration and activation services offered by the social economy support centres (Kozak, 2020[21]). However, the social economy could be better integrated with the rest of the social welfare system and public employment services. Despite significant funds allocated to support its development, the current condition of the sector is rather weak. At the end of 2019, over 1 500 social cooperatives operated in Poland, employing 8 800 persons (Figure 4.8). This is a rapid increase, considering that only 187 social cooperatives operated in Poland in 2009. However, considering the scale of economic inactivity in Poland, social cooperates still play a limited role and are unevenly distributed territorially (Ministerstwo Rodziny, Pracy i Polityki Społecznej, 2020[22]).

The rapid increase in the number of social cooperatives observed after 2010, related to the availability of European funds to support these entities, has also slowed down significantly. Multiple stakeholders have emphasised that social cooperatives are overregulated and difficult to implement, and that financial support is limited. Therefore, in recent years, other legal forms of social enterprises are being promoted, such as NGOs engaged in economic activation or non-profit companies.

Figure 4.8. The growth of social cooperatives has slowed in Poland

The new impetus for the development of the social economy in Poland may lead to a new Law on the social economy. The draft Law is currently under public consultation (Minister Rodziny i Polityki Społecznej, 2021[23]). It may introduce the status of a “social enterprise”, which can be obtained by cooperatives, NGOs and non-profit companies that provide reintegration services to persons threatened by social exclusion, or that provide social services in local communities. However, the new bill has also faced criticism as it places too much administrative burden on social enterprises, while not creating sufficient incentives and conditions to create social enterprises (Ogólnopolski Związek Rewizyjny Spółdzielni Socjalnych, 2021[24]).

4.4.3. European Social Fund

The European Social Fund (ESF) is an important instrument for professional and social activation. ESF strengthens the activities of public employment services, social assistance and many non-governmental organisations in Poland. ESF has brought two innovations to Polish active labour market policies.

Including inactive persons as a target group in the labour market policy and social assistance.

In Poland, for the 2014-2020 period, the ESF was implemented in one national programme and 16 regional programmes. Direct support to persons (unemployed, economically inactive, working) is generally provided at the regional level. There are exceptions, however. One relates to active labour market programmes targeted at young people, which are implemented at the national level.

Programmes financed by European funds identify the economically inactive as a target group, unlike Poland’s PES. The fact that this group was included specifically as a target group is a first for social policy in Poland. Professionally inactive people have been indicated as the target group both in projects implemented in the area of the labour market and in the area of social inclusion. This resulted in the inclusion of inactive persons as labour market activation project participants. However, it is worth noting that the share of the economically inactive among the participants differs by voivodeship. Activities in the field of the labour market (investment priority 8ii) addressed to young people (up to 29 years of age) were mainly attended by the unemployed. The economically inactive constituted only 10% of participants, ranging from 6% in Kuyavian-Pomerania and Podkarpacia to 15% in Lower Silesia.

Regional operational programme data from Podkarpacia and Lower Silesia show that participation of economically inactive persons in projects varies depending on the field of intervention (Figure 4.9). It is relatively low for labour market measures and relatively higher in the area of social inclusion programmes. It should be stressed that public employment services are allowed to provide support only to registered unemployed persons in their projects. Inactive persons can participate in projects implemented by NGOs. The data thus confirms the strong concentration of labour market policies on unemployed persons and the marginal participation of inactive persons.

Data also show that there are significant differences in the participation of inactive persons in the area of social inclusion. Participation is relatively higher in active integration and relatively lower in social economy programmes. This may be a result of the specific feature of the social economy support, which is also addressed to employees of social enterprises and the broad environment of the social economy.

Figure 4.9. Economically inactive persons participate in projects implemented mainly in the area of active integration

Economically inactive persons participating in ESF projects are generally in a worse situation compared to the unemployed and the employed. Their inactivity correlates with disability (Figure 4.10). In Podkarpacia and Lower Silesia, persons with disabilities accounted for 43% of project participants who were inactive, and only 11% of those categorised as unemployed.

Figure 4.10. More people with disabilities are among the economically inactive participants of ESF projects

Economically inactive participants in ESF projects have a lower level of education compared to unemployed participants. Among inactive project participants, 35% had only the lowest level of education and only 8% had a high level of education (Figure 4.11).

Figure 4.11. More people have a low education level among the economically inactive participants of ESF projects than among unemployed participants

ESF projects can be implemented by public employment services, social welfare centres, NGOs, and private companies. Projects implemented by PES or social assistance centres have some weaknesses, as described in chapters 3.1 and 3.3. Public employment services focus primarily on professional activation of those unemployed that are more easily placeable, while social assistance centres focus to a large extent on social integration of the long-term unemployed and economically inactive. However, in the latter case, an attempt was made to implement more comprehensive projects, which is described in more detail below.

Numerous projects on social and professional activation are also implemented by NGOs. According to regional institutions, it is the non-governmental organisations that manage to effectively combine social and professional activation. Non-governmental organisations can more flexibly adjust the scope of support to the needs of participants, as they are not limited by detailed legal regulations. They also often have experience in combining various elements of social and professional integration. Their staff is often better prepared for such an integrated approach than the rigid public sector.

Many NGOs have developed an effective approach to the activation of economically inactive persons. Projects usually offer a support pathway: a set of activities that, implemented gradually, is intended to lead to effective activation. In most cases, more emphasis is placed on social activation at the beginning: changing attitudes, developing social competence, and helping to solve social problems. Professional activation begins at a later stage: recognition of professional experience, training, internships, and support in the workplace. Project providers usually underline that this first phase is necessary for success. However, project providers also acknowledge that for some groups, a first phase that is too long can be daunting, resulting in participants dropping out of projects.

Box 4.4. ABRAMIS Foundation as an example of the effective integration of inactive persons

The ABRAMIS Foundation operates in Zgorzelec, a city on the Polish-German border in the Lower Silesian voivodeship. For over 10 years, the Foundation has been working on the social and professional activation of people in particularly difficult situations. Professionally inactive people dominate among the Foundation's clients. It is practically the only such institution in the county of 90 000 inhabitants.

The standard support programme of the Foundation includes consultations with a psychologist, a career counsellor who helps to determine professional experience, and an employment broker who finds suitable job offers. Participants are directed to vocational training and internships. At the same time, they participate in workshops to develop psychosocial competences. They can also use the services of a psychologist or substance abuse therapist.

Source: https://fundabramis.pl.tl/ (accessed 22/06/2021)

The projects implemented by NGOs, which successfully combine social and vocational integration, have many elements in common. On the basis of analysing a number of models in different projects, researchers have identified the elements that are common to many projects implemented by NGOs that successfully combine social and vocational integration:

the support is comprehensive - social activation complements professional activation; it is often complemented by additional activities (therapy, counselling);
support is essentially individual; work with the client is conducted by psychologists or specialised trainers;
an individual plan is used to precisely define deficits or potential and to find corrective tools;
the offer of professional activation is adjusted to the options available on the labour market;
assistance is gradated - some benefits (e.g. rent subsidies, telephone equipment, etc.) are available only after the first stages of activation;
solutions are sought that facilitate the reconciliation of family and professional life;
protective measures are introduced in the labour market during the initial period after starting work (e.g. work in a social enterprise, mentoring and regular contact with people who have started work) (Kwiecińska-Zdrenka, 2019[25]).

The implementation of projects for economically inactive people also has its challenges. The most important of them is to reach out to the economically inactive and encourage them to participate in a project. Some may not be interested in participating due to the risk of losing social benefits or difficulties in accessing childcare. Project designers usually collaborate with various organisations and institutions in reaching out, but word of mouth is usually the most effective method. In order to encourage participation in such projects, attractive elements are often included: driving licence courses, paid internships, etc. After joining the project, most participants are quickly convinced that they should participate and benefit from the support. Only around 30% of participants drop out. Substance abuse, problems with the law, etc. are significant factors.

Implementation of system projects by social assistance institutions

Social assistance units began implementing ESF projects. These were first introduced in the 2007-2013 programming period. Social assistance units could apply for funds outside of the competition procedure. These projects constituted a set of activities related to social, professional, educational and health activation. In practice, they were an important supplement to the standard tools offered by social welfare centres. They allowed for the actual implementation of the activation function of social assistance and became an important supplement to the routine activities of social assistance centres. In these projects, models of vocational activation and social reintegration were combined, thus offering clients more comprehensive services.

The effectiveness of the projects financed by ESF depends largely on their target group. According to evaluation studies, 18% -28% of participants in projects in the field of social inclusion and 46% -67% of participants in projects in the field of the labour market entered employment within six months after the end of project participation. These differences are expected, given the more difficult situation of clients of institutions that implemented projects in the area of social inclusion (Zub et al., 2015[26]).

Projects implemented by social assistance centres have many advantages but also face challenges, particularly timing of services and sustainability. One of them is the project nature of these activities, as ESF projects start at a specific point in time and are targeted to a specific group of participants, and usually have a fairly detailed scope and duration of support. As a result, activation services are not always available when they are needed, but rather within the project cycle. The scope and duration of support cannot be fully adapted to the needs of recipients but must fit within the adopted project framework. Some flexibility is possible in projects, but its scope depends on the project leaders’ experience in planning and securing funding for projects, as well as the approach of the institutions supervising these projects.

It should also be noted that the implementation of projects run by social assistance centres under the ESF is strongly influenced by the capacity of social assistance institutions. Units with less staff, expertise and financial capacity do not have enough resources to implement projects. And even if they implement them, they face difficulties such as staff shortages, limited access to specialists and a small or non-existent support infrastructure among the institutions in the social assistance community (Banasiewicz et al., 2014[27]).

Projects addressed to economically inactive people at risk of exclusion also reveal two broad approaches within labour market policy-making in Poland.

According to some, ESF projects for the economically inactive, especially those implemented by social welfare institutions or non-governmental organisations, should primarily focus on social reintegration. Thus, programmes should restore the ability of participants to function in society and in a group. Only people who have undergone the process of social reintegration and who have been “prepared” should be referred to professional activation programmes, implemented, for example, by local employment offices. From this perspective, these projects should not be monitored in terms of the achieved employment effect.
The second position emphasizes the integrative function of work and is closer to the “job first” approach. Supporters argue that work itself creates the environment to develop and train social skills.

In Poland, the emphasis on social integration is clearly the dominant position among representatives of aid institutions. However, existing literature underlines the large variety in needs of economically inactive people or people at risk of social exclusion. Some will first require help in solving their problems in life, e.g. debt, substance abuse, mental health challenges, or housing issues, while others may benefit socially from labour market integration .

4.5. How Poland targets Active Labour Market Policies

4.5.1. Labour market policy towards people with disabilities in Poland

Disability, or more broadly – illness, is one of the main reasons for inactivity in Poland. According to the LFS in 2020, 69% of all people with disabilities of working age were inactive. The low level of the economic activity of people with disabilities has been ongoing for many decades. In 2010, only 26% of men and women with disabilities participated in the labour market (Figure 4.12). The economic activity of men with disabilities has stayed relatively stable, falling to 25% in 2014, before rising to 28% in 2020. The rate of women with disabilities participating in the labour market, however, has risen from 26% in 2010 to 36% in 2020.

Figure 4.12. The activity rate of men with disabilities has remained stable, while that of women has risen

The activation of people with disabilities in Poland is financed from three main sources:

The National Fund for the Rehabilitation of Disabled Persons (PFRON), a special fund, financed by contributions from employers who do not reach the minimum level of employment specified in the regulations for people with disabilities;
The Labour Fund, a special fund, also financed by contributions from employers, to finance unemployment benefits and active labour market policies;
The European Social Fund.

All funds focus mostly on supporting the employment of people with disabilities who are already active, and very limited resources are targeted to the activation of economically inactive people. The main source of financing for these activities is PFRON. 98% of PFRON funds are spent on vocational and social activation. However, the vast majority of these funds are allocated to co-financing the cost of employers to employ people with disabilities. In 2019, PLN 3.3 billion (710 million Euro) were spent for this purpose.

This subsidy is intended to encourage employers to employ people with disabilities. The amount of the subsidy for salaries depends on the level of disability. However, remuneration subsidies do not differ depending on, for example, the status of a person with a disability in the labor market. As a result, the same wage subsidy is allocated to employers employing people with disabilities with extensive professional experience, as well as people who had never previously been active on the labor market. In November 2019, funding was received by 32 000 employers who hired 246 000 people with disabilities. There is no independent assessment of the extent to which this instrument fulfils its function (PFRON, 2020[28]). This instrument is specifically aimed at employers, serving as a demand side policy. It is also indirectly used by people with disabilities working in subsidised workplaces.

Other vocational rehabilitation instruments are also directed primarily to people who are already professionally active, supporting their skills and reducing labour costs. These instruments can be targeted directly at people with disabilities or indirectly through institutions. Examples of such instruments include:

Occupational therapy workshops (WTZ), which served 27 691 people with disabilities in 2019;
Vocational development centres (ZAZ), where 5 280 people with disabilities worked in 2019 (PFRON, 2020[28]).

The participation of people with disabilities in occupational therapy workshops, in accordance with the provisions of the Act on vocational and social rehabilitation, are meant to support the social and professional independence of people with disabilities. However, according to PFRON data, only 1.5% of WTZ participants took up employment in 2019. Thus, WTZ actually play a small activating function, and is in practice more focused on rehabilitation and care functions.

Only a small part of PFRON funds are directed to people with disabilities who could potentially work. The most important instruments include commissioned tasks, performed by non-governmental organisations and financed by PFRON, voivodeships or counties. However, only a small part of these funds is allocated to vocational activation. In 2019, only 11% out of PLN 280 million was spent on projects supporting vocational rehabilitation. In this context, the main challenge is the uneven territorial distribution of support and the low share of people in the most difficult situation among the beneficiaries.

PFRON funds are also spent on professional activation of people with disabilities by county governments. In 2019, local governments spent PLN 48 million for this purpose, which accounted for 5.5% of the total expenditure of local county governments from PFRON. The remaining funds were allocated to social rehabilitation, including the financing of WTZ. Out of PLN 48 million for vocational rehabilitation, only 11% was allocated to labour market services and instruments targeted to jobseekers with disabilities registered in local employment offices. In 2018, 1 115 persons used these instruments (PFRON, 2020[28]). This represents only arout 5% of the people with disabilities who were registered as jobseekers in employment offices in 2019. Other funds for vocational rehabilitation are allocated to support employers or those people with disabilities already active. These funds are typically channelled to job creation, purchasing equipment that allows people with disabilities to carry out their work, and to support start-ups.

PFRON funds tend to support people with disabilities who are already in the labour market, primarily as employees and to a lesser extent unemployed. These two groups account for less than 30% of all people with disabilities, as most are economically inactive.

Persons with a disability may be registered in the local employment office either as jobseekers or or as unemployed. Activation measures for jobseekers with a disability are financed by PFRON. Activation measures for unemployed persons with a disability are financed by the Labour Fund. According to the statistics from the Public Employment Services, in 2019, there were 154 000 unemployed persons with disabilities registered with the local employment offices. They constituted 6.7% of all unemployed. Although persons with disabilities are usually in a more difficult situation in the labour market, they participate much less frequently in active labour market programmes. This is especially the case for programmes that generally result in more job placements, such as training, internships or subsidised employment. Unemployed people with disabilities participated in in 2019 at a rate of 0.7%, 2.3% and 0.9% respectively, compared to 1.4%, 4.1% and 1.5% of the total unemployed (Figure 4.13). People with disabilities are also less likely to receive subsidies to start a business. At the same time, they participate in similar proportions as the general population in public works and social benefit works, instruments characterised by significantly lower effectiveness when evaluated on participants’ likelihood of transitioning into employment.

Figure 4.13. Unemployed persons with a disability participate to a lesser extent than other unemployed people in labour market programmes offered by PES in Poland

Despite lower participation, the job placement effectiveness of programmes for people with disabilities is only slightly lower than for the general population of the unemployed. This may indicate that only the most job ready people with disabilities participate. People with disabilities in a relatively better situation may be recruited to participate in labour market instruments, revealing the need to tailor instruments to those with higher levels of disability.

The Polish government has undertaken several initiatives that may lead to a gradual change to the approach of integrating people with disabilities into the labour market. One of the new initiatives is the Solidarity Fund, under which several programs were launched. The first is the co-financing of local governments and NGOs for assistant services geared towards people with disabilities. Within this programme, people with disabilities can get help in everyday functioning, which may translate into an increase in their professional activity. Services provided by the assigned assistant include help with traveling to the work place or educational institutions, organising access to medical care, facilitating access to leisure activities and assisting with everyday activities. The scale of the program is significant. In 2021, 829 entities received funding for this type of service (Ministerstwo Rodziny i Polityki Społecznej, 2021[29]). The second important program is the co-financing of respite care, which may affect the social and professional activity of caregivers. The respite care programme aims to relieve the pressure on caregivers of persons with disabilities by supporting caregivers with their daily tasks or by temporarily taking over care duties. In 2021, 738 local government and non-governmental entities were recommended for funding through the respite care programme (Ministerstwo Rodziny i Polityki Społecznej, 2021[29]).

In 2021, the Polish government also adopted the Disability Strategy, according to which by 2030 the employment rate of people with disabilities should increase to 40%. The Strategy envisages a number of activities aimed at directly supporting people with disabilities in their activity on the labor market (Biuro Pełnomocnika Rządu do Spraw Osób Niepełnosprawnych, 2021[30]). The social economy is also expected to play a significant role here, as a place of employment of persons with disabilities.

Supported employment is being developed as a supplement to traditional active labour market programmes for persons with higher levels of disability. It is assumed that an instrument focussed on people with higher levels of disability will be launched with the support of European funds under the new EU budget plan.

The Ministry of Family and Social Policy has also started to support persons with disability in its “Inclusion of the Excluded” project. The project started in January 2021 and is financed by the European Social Fund. It aims to review and improve exisiting instruments of professional and social activation of persons with disabiliy. New instruments targetting the vocational rehabilitation of persons with disability will be pilot-tested within the project.

4.5.2. How policies in Poland (in)activate older persons

Poland is undergoing a period of rapid population ageing. The median age of the population will increase from 39 in 2015 to 45 in 2030. By the middle of the 21st century, it will reach 50 and is expected to be the fifth highest in the EU (Lewandowski and Rutkowski, 2017[31]).

The activity rate in Poland for older people of working age is lower than in most OECD countries. In the 3rd quarter of 2020, 68% of women aged 55-59 were active and only 29% of women aged 60-64. For men, the activity rate of persons aged 55 years or more was also lower compared to the prime working age population.

The main reasons for the inactivity of older person in Poland is retirement, illness and disability and, particularly for women, family obligations. In 2019, 29% of the population aged 55-64 was inactive due to retirement. Among women, 41% of the 55-64 year olds were retired, while the share amog men was only 15% (Figure 4.14)

The main reason for the early retirement of the older people of working age is the existing pension system in Poland, in particular the retirement age. The retirement age is 60 for women and 65 for men. Two main reforms resulted in an increase in the activity rate of older person. In 2009, the possibility of early retirement was strongly limited. As of 2013, the retirement age of women and men began to gradually increase, as a result of a second reform introduced in 2012 (see Box 4.4). Since then, the percentage of women aged 55-64 who are economically inactive due to retirement declined from 53% in 2010 to 36% in 2017. In 2017, however, the latter reform was reversed. The retirement age of 60 for women and 65 for men was reinstated and the percentage of inactive women in the 55 to 64 bracket has started to grow again and reached 41% in 2019 (Figure 4.15).

Figure 4.14. Retirement, illness and disability are the main reasons for the economic inactivity of persons 55-64 years of age

Figure 4.15. Influence of the pension system reform on the level of economic inactivity

The so-called cohort effect impacts the level of activity among older people of working age persons. The cohort effect refers to the differences in education between different generations. For example, people aged around 60 in 2020, compared to older cohorts, are on average better educated and more often work in jobs where a longer working life is more likely (Szukalski, 2020[32]). This trend significantly contributed to the continuation of work after reaching the age of 60 (Lewandowski and Rutkowski, 2017[31]).

Another factor influencing the level of economic activity is health status. Generally, Poles aged 50 and over have slightly fewer healthy years of life ahead of them than the EU average. Poles aged 55-64 also assess their health status as worse than the EU average. In 2019, 61% of EU residents aged 55-64 and 42% of Poles of the same age group assessed their health as good or very good. Around 9% of EU residents and 13% of Poles assessed their health status as bad.

The difference in the health status of working and non-working older people of working age is an important factor that may explain economic inactivity among this group in Poland. Indeed 6% of Poles aged 55-64 in work assessed their health as bad, while the share stood at 27% among persons inactive for reasons other than retirement (Figure 4.16).

Figure 4.16. Inactive persons aged 55-64 assess their health status as significantly worse than those in employment

Above all, it is desirable to encourage and make it easier for older workers to stay economically active. In analysing the issue of the work of older people, an encompassing approach is needed (Lewandowski and Rutkowski, 2017[31]):

Investments in lifelong learning, as technical progress may leave older workers behind;
Investments in occupational health and safety, workplace ergonomics, and the mid-career identification of health obstacles and risks relating to a particular job;
Expanding part-time and flexible working arrangements.

Currently, activities aimed at extending the economic activity of older people are scattered and therefore difficult to assess. This is due to the fact that, inter alia, comprehensive policies aimed at improving the labour market situation of older people of working age require actions in different areas, for which different ministries are responsible. As a result, the proposed programmes are included in different strategic documents. These include the Social Policy towards the elderly until 2030 (Ministerstwo Rodziny, Pracy i Polityki Społecznej, 2018[33]), the National Health Programme for 2021-2025 (Ministerstwo Zdrowia, 2021[34]) and the National Employment Programme 2019 (Ministerstwo Rodziny, Pracy i Polityki Społecznej, 2020[11]).

One of the important instruments for supporting the participation of older workers in the labour market is the ESF, and in particular its adult learning and lifelong learning programmes. According to the guidelines of the Ministry of Development Funds and Policy, ESF funds in the area of adult learning should in particular be allocated to support people with the largest competence gap in the field of ICT and foreign languages, and with the greatest needs in access to education, including, among others, people with low-skills and persons aged 50 years and more. This is particularly important in view of the significantly lower share of older people in lifelong learning. In 2016, 45.9% of people aged 18-69 and only 25.6% aged 60-69 participated in any form of lifelong learning (Główny Urząd Statystyczny, 2020[35]).

Older adults are overrepresented in projects on adult learning. Based on the data on the participants of ESF projects from two voivodeships, Podkarpacia and Lower Silesia, 60% of persons participating in adult training were over 55 years of age (Figure 4.17).6 A particularly high percentage of people aged 55 and over was economically inactive (87%) and unemployed but not registered with employment offices (57%). In the case of economically active people in work, the share of older people was clearly lower and amounted to 30%.

The proportion of older people participating in education is higher in ESF projects than in the overall population. Data for ESF projects can be compared with general statistical data on participation in labour market training programmes. According to LFS data, in the 3rd quarter of 2020, 28% of all persons who participated in non-formal forms of education within the last 4 weeks were aged 45 and above (Główny Urząd Statystyczny, 2020[36]).

Figure 4.17. 60% of the participants in training programmes for adults financed by ESF are over 55 years of age

Another field of intervention of the ESF supporting active aging are regional health programmes. They are financed under Investment Priority 8vi active and healthy aging. According to the guidelines issued by the Ministry of Funds and Regional Policy, financing should aim to prevent diseases that are a significant health problem in the region; eliminating health risk factors in the workplace, and providing medical rehabilitation to facilitate a return to work (Ministerstwo Inwestycji i Rozwoju, 2019[37]). However, the scale of these programmes is rather limited. For example in Podkarpacia, plans are to have the regional health programmes cover only 2.7% of the population aged 45 years and above, while in the Lower Silesian voivodeship only 2.1% are planned to be covered. Taking into account that the programmes are usually preventive and focus on diagnostic testing for selected diseases, no significant impact of these programmes is to be expected.

4.5.3. How policies in Poland (in)activate women

The economic activity rate of women is significantly lower than the rate of men (Figure 4.18). Since 2010, the gap between the labour force participation rate of women and men has remained at a level of 13-14 percentage points (age 15-64). As discussed in Chapter 1, particularly large differences are visible among younger people aged between 25 and 44. For this group, the difference in economic activity is around 15 percentage points. Among older people, the differences are less salient if the different retirement ages of men and women are taken into account. Among older people, the main factor of deactivation remains retirement.

Figure 4.18. The economic activity of men is higher than women in all age groups except those just before retirement age

There are also large differences in the causes of professional inactivity between men and women. For young and middle-aged women, the main reason are family obligations, such as caring for children or other persons, as well as other personal or family reasons (79% of inactive women aged 24-44, Figure 4.19). In the case of younger and middle-aged men, illness and disability are the main reasons for professional inactivity (60% of inactive men aged 25-34, 54% for 35-44, Figure 4.20).

Figure 4.19. Family and household responsibilities are the dominant cause of economic inactivity among middle-aged women

Figure 4.20. Illness and disability drive the economic inactivity of middle-aged men

One of the key factors influencing the level of the economic activity among women is the availability of childcare services. In Poland, the availability of childcare services has improved significantly since 2003 (Figure 4.21). A number of factors contributed to the increase in the availability of childcare. State policy strongly supports the participation of children in pre-school education. In accordance with the provisions of the Education Law, children at the age of 6 must undergo compulsory pre-school preparation. Children aged 3-5 must have guaranteed access to preschool education, which is the responsibility of the local government. Local governemts are also obliged to create a network of preschool education institutions so that each child is no more than three kilometers from such a facility. Preschool education is financed from the state budget. Public kindergartens are required to provide a minimum of 5 hours of free lessons, and the fee for each additional hour is set to a maximum of PLN 1.

Access to pre-school education for children over three years of age is now high. In fact, those living in cities have widespread access to pre-school education. Places now exceed 103% of children aged 3-6. (Figure 4.21). On the other hand, in rural areas of Poland, this percentage stood at around 69% in 2019, while in some regions it was as low as 50-55%.

Figure 4.21. Access to pre-school education has been improving for years

Access to childcare for children under 3 years of age is also supported by local and national governments. In 2011, the Act on the care of children up to 3 years of age was adopted. It introduced new, more flexible forms of childcare. It also relaxed the conditions for operating a nursery. In addition, the Toddler+ programme has been operating since 2011 (as of 2018 under the name “Maluch+”), which subsidizes care services for children up to 3 years of age from government funds.

However, access to childcare services for very young children is still insufficient. This particularly applies to the care of children up to 3 years of age and the availability of care and pre-school services in rural areas. In 2019, according to Statistics Poland data, only 12.4% of children under the age of 3 were covered by childcare services. Big differences also exist between voivodeships. Figure 4.22 shows that the lowest percentage of children under the age of 3 covered by childcare can be found in the voivodeships of Eastern Poland, where agricultural production dominates (Swietokrzyskie – 8.5%, Warmian-Masuria – 8.6%). The voivodeships of Western Poland show relatively better childcare coverage (Lower Silesia – 19.2%, Opole region - 17.2%, West Pomerania - 14.7%, Lubusz - 14.5%).

Figure 4.22. There are large regional disparities in the share of children in childcare facilities

Access to childcare services, however, is not the only condition for improving the level of the economic activity of women. According to research conducted in the Podkarpacia region, 50.6% of children under the care of economically inactive persons are using institutional care at the same time. Most of them attend school, 12.0% of these children attend kindergarten and 5.5% attend a nursery. The majority of inactive parents whose children use institutional care state that their possible return to the labour market is not related to childcare, although the reason given by them for their professional inactivity is the need/desire to look after their children (Wojewódzki Urząd Pracy w Rzeszowie, 2019[38]). Access to child care therefore does not automatically lead to the economic activation of women.

In Poland, economically inactive women tend to have lower levels of educational attainment, live in smaller towns and have at least two children on average (Magda, 2020[39]). For these women, a number of other factors contribute to their inactivity. Access to care facilities is important, though the price of childcare, working hours and attitudes toward institutional childcare are also relevant factors. For some women, work can be unattractive economically due to low wages and long hours. The available income does not compensate the additional costs, loss of childcare time and potential losses of social benefits. This applies particularly to single parents and those with low levels of educational attainment, who may not be able to access well-paying jobs.

Labour markets may not be adapted to the needs of working mothers. Only 12% of working mothers in Poland can determine their working hours, compared to 40% on average in Europe. Inflexible places of work, not adapted to needs of parents, are even more common for women with lower levels of education living in smaller towns and villages. Furthermore, a very small proportion of women benefit from voluntarily reduced working hours: only 6%, compared to 18% on average in Europe. Inflexible, low-paid work places may be one of the reasons for the low willingness to work among women, even when institutional care is available.

For a share of women, beliefs about the social roles of women and men also seem important. Data suggests a larger share of women in Poland hold beliefs closer to the traditional family model compared to the EU average, with an economically inactive mother devoting her time to childcare. Similarly, men in Poland also tend to have more traditional beliefs on models of family and divisions of responsibility. Research suggests that the uneven distribution of family duties between partners is also an important factor in the economic inactivity of women (Magda, 2020[39]).

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Notes

← 1. One of the main categories of jobseekers are people with disabilities. In November 2020, they constituted 35% of all jobseekers.

← 2. Based on interviews with PES members of staff carried out by the OECD for this project.

← 3. Based on interviews with PES members of staff carried out by the OECD for this project.

← 4. One family can receive support for several reasons (e.g. disability and unemployment).

← 5. The development of the social economy in Poland served many purposes and should not be limited only to the issue of social and vocational reintegration. However, the integration dimension in the Polish model is very important, particularly from the perspective of ESF funds.

← 6. Data for Investment Priority 10iii, whose main aim is to support the participation of adults in training and education. It should be noted that adults also participated in training and education under other investment priorities, focused, for example, on the labour market, social integration, etc.

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