Mother is flexible, employers could be too

(infographic: D. Gąszczyk/ CC BY-NC by Daniel Rashid)

Demographic changes will of course translate into the economic situation. In a longer perspective, the ageing of the population will result in declining employment and a slowing of economic growth.

The number of people in productive age per one person in post-productive age will drop from 5.3 in 2010 to 2.8 in 2030. A lower ratio of working people to people benefiting from public services will exert negative pressure on the condition of the public finance sector and on the pension system. The ageing of the population will also result in a change in the structure of public expenditure in favour of subsidizing the pension system and financing health care at the expense of education.

A certain positive side-effect of the process of population ageing will be the decline in unemployment – this change, however, could be misinterpreted as an improvement in the labour market, while  it is actually the effect of unfavourable demographic changes.  The ageing of the population will also have an important political aspect. In international politics, the influence of a given country is derived from its economic and demographic potential. In EU institutions such as the European Parliament and the European Council, the number of votes earmarked for a given country depends on the size of its population. Therefore, a decreasing population entails a slow weakening of Poland’s position in the EU and in international politics.

(infographic by D.Gąszcztyk)
(infographic by D.Gąszcztyk)

 

The factor explaining Poland’s demographic problems  is  the persistently low fertility rate since the beginning of the transformation. As late as in 1990 the Total Fertility Rate (TFR) stood at 2.1 and ensured that the coming generations would be as populous as the one in 1990.  The transformation brought about a dramatic  decline in fertility, as much in Poland as in other post-socialist countries. On the one hand, the shock of the change in the economic system made the conditions for having children less favourable, whilst on the other hand, there was a shift in the attitudes and preferences of the young generation.

Unlike their parents, young Poles primarily strive to obtain material status, placing emphasis  on education and a professional career, shifting procreation to the moment when they can count on a certain financial stability. However, it should be a matter of concern that all post-socialist countries except Poland have experienced a rebound in fertility indicators in the last 10 years. As a result, among EU countries, only Portugal has lower fertility rates than Poland.

 

(infographic by D.Gąszcztyk)
(infographic by D.Gąszcztyk)

 

However, changes in worldview can provide only a partial account of the phenomenon of low fertility. There is another factor at play. Polish women decide to have fewer children than they would prefer since they encounter economic obstacles. According to the results of research conducted by a team led by Professor Irena Kotowska (2014), postponing the decision to have the first child is due to the lack of professional and financial stability. In the case of giving up on having a second child, the most frequent reason is obstacles in combining parenting with a professional career. Indeed, a synthetic index measuring the ease of combining a professional career with family duties, constructed by Anna Matysiak and Dorota Węziak-Białowolska (2013), places Poland at one of the last positions in the EU (see Figure 2). By dismantling those barriers it is possible to raise the fertility indicators. Thus state intervention is desirable.

 

(infographic by D.Gąszcztyk)
(infographic by D.Gąszcztyk)

 

An improvement in the possibility of combining a professional career with parenting is linked with widespread and cheap access to child care facilities (crèches and kindergartens). The immense  demand for crèches is evidenced by the fact that crèche occupancy amounts to 99.3 per cent. In spite of this, the percentage of children below the age of three in crèches amounts to only 4.8 per cent. The adoption of the so-called crèche act in 2011 has not brought about any major change so far.

It seems that in order to achieve the expected improvement, initiative should be taken by local authorities to increase the number of places in public crèches. There are similar problems in terms of supply trouble in the case of kindergarten care. As a result, the number of children of kindergarten age in Poland that are not enrolled in formal institutions of child care is the highest among EU countries and as high as 65 per cent, while in Sweden and France it amounts to 3 per cent and 5 per cent respectively.

Another action that allows combining parenthood with a professional career is the promotion of flexible, i.e. parenthood-tailored forms of work, such as part-time employment and flexible working hours.  Also in this respect Poland does not keep up with the majority of EU countries. The percentage of women working part-time in Poland amounts to 10 per cent, while the average for “old” EU countries is 38 per cent. This state of affairs is attributable to the small availability of this form of work for women – employers are still reluctant to recruit part-time.

Another domain for action consists in changing the labour law so as to increase the feeling of professional stability among young Poles. In this context, one could  consider the possibilities of standardizing worker protection guaranteed by various types of job contracts. It might be worth abolishing the distinction between permanent employment contracts and fixed-time employment contracts. Instead, one employment contract could be introduced, which following a one-year period of employment would automatically transform into a permanent employment contract.

In the case of less than a year’s tenure the period of notice would be as short as possible (2 weeks), increasing incrementally to 1 month beyond the 1st year threshold  and two months following another year at work. Such a uniform contract would have the advantage of maintaining the level of costs incurred by employers while doing away with a large portion of employee uncertainty.  It would be worth introducing those changes right now. The moment is ideal, as in accordance with the ruling by the European Tribunal of Justice of March 2014, Poland will have to amend its legislation concerning fixed-time employment contracts  anyway.

Another factor sowing uncertainty is the abuse of civil law contracts by employers. From this point of view the government’s initiative to introduce a social insurance premium on contracts of mandate is a good move.  In a longer perspective, the whole system of labour law in Poland should evolve towards reducing the differences between employment contracts and civil law contracts, so that the latter stop competing with the former. The present system has led to a polarized situation in the labour market with a better and worse-off segment, depending on the type of employment agreement. The tenets of the courageous proposal of substituting present employment contracts and civil law contracts with the so-called single contract have been put forward by Piotr Lewandowski and Piotr Arak, together with other proposals of amendments in the Labour code.

To sum up, the Polish labour market in the not too distant future will be strongly affected by the ageing of the population. Till the end of this decade, i.e. in a time frame shorter than two Parliamentary terms of office, the population in productive age will decline by 1.4 million. This development will be due to low fertility rates persisting since the 1990s.  In order to improve the situation, there is a need for actions which will remove obstacles forcing young Polish women to give birth to fewer children than they would have otherwise preferred. We need more available child care services guaranteed by local authorities and the promotion of part-time jobs as well as flexible work hours.  A discussion should be started as well about the remodelling of the labour law system in order to introduce a similar level of worker protection for persons employed on the basis of various employment agreements.

The author works at the Institute for Structural Research in Warsaw. He is the winner of the Obserwator Finansowy award in the contest “If it were up to me..”, 2013 edition, for his study about the possibility of introducing certain changes in employment offices. Such changes might contribute to reducing unemployment and to the better earmarking of social aid. His work has been entitled “Fighting unemployment blindfolded. It does not have to be that way”.

 

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