Securing Poland’s economic success II: labour market and product specialisation – is there a link?

The flexibility of Poland’s labour market has served its economy well and helped it to catch up with the rest of the EU. It has, however, created room for an unprecedented use of temporary contracts, including so-called ‘civil law contracts’. The widespread use of temporary employment can be a mixed blessing. Although it can help cost competitiveness and support higher employment levels, it can slow down physical and human capital accumulation, and weigh on innovation. In the long term, these ‘side effects’ can hamper a re-orientation of the economy towards high-technology products and services and, ultimately, weigh on its future growth potential.