Educational Attainment and Labour Market Prospects

Abstract

The development of market economy in Poland is associated with a significant increase in the role of educational attainment in determining labour market prospects. This results from an increase in the demand for highly qualified labour and a simultaneous decrease in the demand for simple manual work. Higher educational attainment is now associated with higher earnings and lower risk of unemployment. Earnings inequality has increased substantially, reflecting an improvement in the earnings status of highly skilled white collar workers and a deterioration of the status of blue collar workers. This implies a significant increase in the rate of return to education to the level comparable of that prevailing in Western Europe, High skills started to pay off. As a result of these changes, families with a high level of human Capital are escaping poverty and are becoming preponderant among the well-to-do families. These are general statistical trends to which there are some exceptions. Particularly, earnings of highly skilled workers employed in social services -teachers, doctors, etc. remain relatively low. These earnings are still determined centrally by the government and the competition for workers by the private sector is weak.