CHANGES IN LABOR INPUT QUALITY IN POLAND

The paper aims to quantify changes in the quality of Poland's working population in 1993-2006. An important drawback of standard measures of labor input, such as the number of people employed or total hours worked, is that they treat the labor force as a homogenous entity. The starting point for calculating effective labor input in this paper is to loosen this assumption by disaggregating employment into groups within which the homogeneity assumption would be more valid. The subsequent aggregation explicitly takes into account the diversity of the marginal product of labor between the groups, using the average wage as a proxy. The empirical analysis is based on microeconomic data from a labor force survey. Education, age and sex were considered as important criteria in accounting for the heterogeneity of labor productivity. The analysis shows that labor input quality in Poland grew in 1993-2006 at an annual average rate of 0.9 percent, adding 0.6 percentage points to the average annual GDP growth rate. The main factor behind the improved quality of labor was an improvement in the educational structure of the working population.