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Poverty in Poland

Irena WóycickaHead of the Social Security Department

woycicka@ibngr.edu.pl

Policies for achieving the Millennium Development Goals in ECE Region:

Reducing extreme income disparities

UNECE Seminar 2-3 October, Geneva

The Gdansk Institute for Market Economics

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Main socio-economic indicators. Poland.

2001

GDP growth in real terms; 1990-2001 145% GDP per capita in relation to average EU* 40% Population 39 Old-age dependency ratio 26 Population under poverty line 16% ** Ginni indicator 0,31 Employment rate 51,3 % Unemployment rate in 2002 19 % Social Spendings in GDP 24 % *in Purchsing Power Standards ** as percentage of population below 60% of median of equalized income in 2001 Sources: Eurostat, National CSO, The Gdansk Institute for Market Economics

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Economic development in Poland

Recession: In 1990, the radical macroeconomic program was introduced (withdrawal of state subsidies, tight monetary policy, liberal trade regulations, privatization, and labour market restructuring). In first two years, GDP declined by 20 percent and unemployment reached 11%.

Recovery: From 1992 Poland experienced GDP growth and decline of inflation. From 1994 on the growth of wages and employment appeared. Poland was one of the fastest growing CEE countries.

Slowdown: Since 1998, there has been a slowdown of growth and raising unemployment. GDP growth declined from 6,8 percent in 1997 to only 1,4 percent in 2002 and unemployment achieved 19%. In 2003 the GDP growth may exceed 3%.

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Income poverty development in PolandPoverty line 1993 1994 1995 1996 1997 1998 1999 2000 2001 Minimum of existence

na 6,4 na 4,3 5,4 5,6 6,9 8,1 9,5

Relative poverty line*

12 13,5 12,8 14,0 15,3 15,8 16,5 17,1 17,0

Legal poverty line**

14,4 19,0 18,0 16,1 15,0 13,0 14,9 13,6 15,0

*50% of average households expenditure ** Poverty line in social assistance; form 1993-2001 – legal poverty line in 1999 in prices from specific year, Source: The Life Condition of the Population in Poland 2001. CSO, Warsaw, 2002; MDG Report for Poland, UN Representative in Poland, The Gdansk Institute for Market Economics, Warsaw, 2002.

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Poverty development in Poland and

economic growth.

In the period of transition the economic growth was correlated with the growth of income inequalities. Even fast economic growth in years 1993-1998 was accompanied by the increase of the relative poverty.

In the period of transition the fast economic growth has only slightly positive impact of the extent of the absolute poverty. During slowdown absolute poverty increased.

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Population at the poverty risk in

2001. Poverty risk in relation to average poverty risk (legal

poverty line)

Households: 2001 With unemployed 3 Muti-childrenb 2,94 Low education (primary)c 1,75 Rural 1,53 Disableda 1,38 Head of family aged 35-44d

1,3

Single parents 1,25 a Families with disabled head in relation to families without disabled persons b Family with 4 and more children cHead of the family has primary and less than primary education; basic vocational – 1,27; secondary – 0,44; tertiary – 0,09 dFfor families with head of the family aged: 34 and less: 1,1; 45-54: 0,9; 55-64: 0,6 ; 65 and more: 1,0. Source: Author’s calculation based on: Conditions of Life of Population in 2001; CSO, Warsaw.

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Net enrolment ratio.

Education Age groups 1990/1991 2000/2001 7-14 95,7 98,6a

15-18 5 2,6a primary

19-24 0 0,0a

7-14 0,2 0,2 15-18 74,8 84

secondary

19-24 4 4 15-18 0,1 0 postsecondary 19-24 3,1 4,4 15-18 0,1 0,2 tertiary 19-24 9,8 30,6 15-18 3,5 3,5 for adults 19-24 3,6 5,3

a In the 1 st and 2nd classes, Source: Rocznik Statystyczny 2001 (Statistical Yearbook 2001), CSO, Warsaw, 2001, p.235

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Education (cont) Significant differences in the

quality of education; Differences in access to education

(disabled, low educated families); Low education ratio of adult

population.

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Health

1990 1999 Under 5 mortality rate 3,4 1,8

27,5 (males)

23,2 (males)

Probabilty of death between the ages 15-59 (%) 9,8

(females) 8,9

(females) Source: CSO, Per thousand of population in each age group

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Access to basic households

amenities

Indicators 1988 2002 Share of urban dwellings with mains water supply facilities in the total number of urban dwellings (%)

95 99

Share of rural dwellings with mains water supply facilities in the total number of rural dwellings (%)

64 89

Source: National Census, 1988,2002.

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CONCLUSIONS Economic growth did not limit the

income inequalities and poverty in Poland;

During the transition period the growing income inequalities were combined with substantial improvement of health status of population, improvement in education and higher standards of dwellings;

• To reverse the trends in the poverty and inequality development is one of the biggest challenges for Poland;

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Conclusions (cont)Strategic points of the policy: Reduction of unemployment and

increase of employment of vulnerable groups as low educated, disabled and women;

Better access to education for vulnerable groups as well as better quality of education;

Acceleration of the social and economic restructuring of rural areas;

Introducing of more effective social policy towards multi-children families.