Local unemployment in Poland: rural-urban contrasts

Unemployment continues to bedevil Poland, albeit with striking sub-national differences, which this article seeks to explain using random effects error component two-stage estimation for the country's NUTS 4 (nomenclature des unites territoriales statistiques) level powiats. Given the economy's peculiar configuration under communism, with its large private agricultural sector, emphasis is placed on rural-urban differences. While less densely populated areas do suffer higher unemployment rates, the effect is moderated by hidden unemployment in farming. On the other hand, powiats that housed the ex-state farms suffer a negative long-term legacy. Other notable results include an evident positive impact of foreign capital on local labour market fortunes.