Young Poles have been hit hard by the jobs crisis. An OECD report says the Polish government should invest more in vocational training schemes and temporarily cut the cost of employing low-skilled school-leavers.

The report says that the economies of countries in the OECD are in the midst of the deepest and most widespread recession for more than 50 years. Output has declined in almost all OECD countries in the past 10 months and, with non-OECD economies also slowing sharply, world growth has turned negative.

Although Poland appears to have fewer problems than other OECD countries in tackling the current crisis, the country is not immune from the global slowdown and will experience a worsening of labour market conditions for many of its citizens. The most recent Polish Labour Force Survey data suggest a rise of the overall unemployment rate from a 6.6% historical low in mid-2008 to around 8.2% during the second quarter of 2009.

Over the same period, the youth (15-24) unemployment rate rose from 16.5% to 19.5%. This deterioration is lower than the corresponding OECD average and much less dramatic than in Spain and in Ireland.

The report says the education attainment among Polish adults is characterised by a relatively small fraction of tertiary graduates: "This probably reflects the legacy of the communist economic system where services (known for employing many graduates) were underdeveloped compared with industry (concentrating mainly on individuals with intermediate and/or vocational qualifications)."

"But things have changed dramatically since the beginning of the economic transition," the report states. "Reflecting the changing structure of the economy and the fast rising share of service-oriented activities, the number of students attending tertiary education programmes has quintupled since the early 1990s.

"Inevitably, in a couple of years, this trend will show up in the statistics on adult attainment but the rapid expansion of tertiary education also raises concerns about its quality. Another side-effect of the dramatic expansion of tertiary education has been a reduction of the number - and perhaps also the quality - of youth completing vocational education and training programmes at the secondary level. The developments also coincided with supply-side challenges."

The report says the largest part of the firm-based vocational education system collapsed with the dismantling in the early 1990s of many state-owned firms that played a pivotal role in the delivery of VET. In addition, the official classification of occupations in VET has become largely obsolescent with the economic transition and needs modernisation.

"There is also some evidence that VET schools struggle to update their equipment and keep pace with industrial and technical changes."

In the short term, the report says the government should focus its efforts on training young people, involving them more in active labour market programmes and making the transition from school to work quicker and more successful.

The key priority is to avoid the build-up of a large pool of youth who become long-term unemployed or drop out of the labour market and are unable to find work easily when the recovery gathers pace, it says.

"The economic and financial crisis has now turned into a jobs crisis, hitting the young hardest everywhere. We need to act now, to prevent a lost generation with its dramatic consequences for people," said OECD Secretary-General Angel Gurría. "Job-search assistance, training opportunities and targeted programmes are needed to help young workers."

The OECD recommends that Poland swiftly introduces a raft of measures, including:

* Improve the quality of vocational education and training schemes so that VET students are awarded certificates that are valued and recognised by potential employers. It would be important aligning the training and certification standards to create a single nationwide VET classification system which has proved effective in other countries.
* Provide hiring subsidies to firms by temporarily reducing social security contributions for low wages to lower the relatively high labour costs of employing unskilled youth.
* Reduce the gap in effective employment protection between open-ended or fixed-term contracts and 'commission contracts'. The government should rebalance the lack of employment protection granted to workers hired on commission/per-piece contracts with the high employment protection afforded to workers with permanent/fixed-term contracts.

The report is the latest in a series launched by the OECD covering 16 countries.

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