Stanislaw Cichocki

Self-employment and the business cycle: evidence from Poland

Two reasons for undertaking self-employment can be distinguished. The first treats self-employment as the only way of avoiding unemployment. According to this view self-employment is countercylical and acts as a buffer. The second reason emphasises the entrepreneurial, risk-taking nature of self-employment, which according to this view is procyclical and similar to wage employment. This article examines these views by looking at labour market flows obtained from the Polish LFS. As the self-employed account for about 20% of the working population in Poland knowledge about their behaviour over the business cycle is of particular importance. The results point to countercyclical behaviour of self-employed farmers and the entrepreneurial nature of own-account workers and entrepreneurs with employees.

Cyclical trend of labor reallocation in Poland: transition and structural change

Two main features of the reallocation process that took place in Eastern European and Former Soviet Union countries should be distinguished. The first feature was the decline in public sector employment as a result of the collapse of state-owned enterprises, linked with an increase in private sector employment as new private firms emerged and old public companies were privatized. The second feature was, and still is, the reallocation of labor from manufacturing to the service sector. Data from the Polish Labor Force Survey for the period 1995–2015 were used to construct measures of worker flows, gross and net, and their cyclical properties were used as a way to test the predictions of structural change and transition theories. It was found that labor market adjustments tend to amplify in upturns of the business cycle, while worker flows contribute only a fraction to the changing structure of employment. The policy implications of these findings are discussed.