GDP per Capita Growth Performance its Sources A Basis

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					GDP per Capita Growth Performance & its Sources
  Polish Regional-Macroeconomic Dimensions 2000-2006

                  A Basis for Further

                    David Clowes

           Department of Household Economics
                 Room 105, Building F,
             Cracow University of Economics
        ul. Rakowicka 27, 31-510 Kraków, Poland.



                   September 2009
                        Sources of GDP per Capita Growth:
                  Polish Regional-Macroeconomic Dimensions 2000-2006


The first decade of economic reform in Poland and the transitional switch towards open
market operations was widely judged as one of the success stories of the entire former
Soviet bloc. Positive overall macroeconomic performance in the country, however, concealed
serious regional, socio-economic disparities whose root causes stem back to the partitions
and which were largely reinforced during the later period of management under Communism.
These inequalities are more dominantly associated with voivodships in the rural east of
Poland, listed below as income group three and frequently referred to as “Poland B”. This
paper questions whether initial signs of catch-up are observable between the eastern regions
of the country and those listed below under the headings of income groups one and two
(“Poland A”). These voivodships, in contrast, are located in the central, southern and western
parts of the country and possess greater shares of industry and services in GDP and thereby
contribute the bulk of national output. Change over time and its sources will be analysed
using the decomposition technique, which measures real GDP capita according to the
performance of its four constituent components: labour productivity, work effort, employment
rate and demography. The work finds that the contribution of these components to GDP
capita vary markedly across all three income groups, consistent with economic structure and
the corresponding number of hours worked. Voivodships from income group one, for
example, achieve higher output per head and tend to work fewer hours, while the reverse is
applicable for income group three. This particular pattern, however, could possibly change as
certain voivodships from the more rural east are revealed to be achieving among the highest
rates of labour productivity in the country and this is supported by high investment growth as
well as structural shifts in employment from agriculture to industry. The time frame used for
this analysis is from 2000 to 2006.

Income Group 1                   Income Group 2                      Income Group 3

Mazowieckie                      Kujawsko-Pomorskie                  Lubelskie
Dolnośląskie                     Łódzkie                             Podkarpackie
Śląskie                          Lubuskie                            Podlaskie
Wielkopolskie                    Małopolskie                         Świętokrzyskie
                                 Opolskie                            Warmińsko-Mazurskie

Key words: Gross domestic product (GDP); gross domestic product per capita
(GDP/Capita); nominal and real; labour productivity; labour market conditions; employment
rate; participation rate; hours worked per job.