The output employment elasticity and the increased use of temporary contracts: Evidence from Poland

Kristof Bartosik () and Jerzy Mycielski ()
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Kristof Bartosik: Institute of Economics of the Polish Academy of Sciences, Nowy Swiat 72, 00-001, Warsaw, Poland

Acta Oeconomica, 2020, vol. 70, issue 1, 83-104

Abstract: The paper investigates how the increased use of temporary contracts in Poland affected employment elasticity with respect to output. The analysis is based on Okun’s law, and covers the period of 1996–2016, with particular focus on the years of 2001–2016 when temporary jobs became prevalent. We look at the relationships between output growth and the growths of aggregate, permanent and temporary employment separately. Our study finds that the responsiveness of aggregate employment to output is positive and changes through time. Interestingly, after 2007, when the use of temporary contracts stabilised at a high level, the employment intensity of growth started decreasing. We relate this to the opposite trends in output responsiveness of temporary and permanent jobs. Elasticity of temporary job was growing, while elasticity of permanent job was decreasing. Our study also shows that initially employers adapt to output changes replacing permanent job with temporary job, next temporary contracts become the main adjustment device.

Keywords: Okun’s law; labour demand; temporary contracts; economic growth (search for similar items in EconPapers)
JEL-codes: E32 J21 J23 J41 (search for similar items in EconPapers)
Date: 2020
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