Tag: Poland

How the Combination of Income and the Quality of Local Conditions Affects Well-being in Old Age

Posted on October 13, 2025 | Policy Brief

Elderly couple sitting on a park bench, enjoying a peaceful moment together, symbolizing financial stability and income well-being in Poland.

Contemporaneous income and the quality of local living conditions have both received recognition in the literature as important determinants of subjective well-being. However, little is known about their joint impact and the possible moderating influence each may have on the relationship with the well-being of the other. In a recent study (Myck et al. 2025), we investigated the role of income and quality of local area on different dimensions of well-being of older adults in Poland. Our findings show that a higher quality of local conditions amplifies the association between income and well-being, which implies that high-income older individuals tend to benefit more from improved local conditions. Our findings suggest that low incomes may constrain older people from taking advantage of local public services, and thus draw attention to policies aimed at improving access to these services, especially in low-income, peripheral areas. While the results also point towards broad benefits of targeted income transfers, it is notable that their effective translation into higher well-being strongly varies with the quality of municipal local conditions.

Introduction

As most developed countries face rapid population ageing, governments continue to seek effective policies to support older adults. Identifying effective policy solutions remains vital in supporting different population groups, including the growing group of older citizens. In this brief, we present a summary of results from a recent study (Myck et al. 2025), in which we examine the role of the combination of incomes and local conditions for the well-being of older individuals. The analysis is conducted on data from Poland, a country characterised by rapid population ageing and a recent prioritisation of monetary transfers in the policy mix, with much less attention given to the financing of local and centrally funded public services. The analysis aims at understanding the role of the quality of local conditions for the well-being of older individuals, and at identifying how the level of income modifies this role. In other words, we examine if higher income affects individual well-being differently in high- compared to low-quality regions.

Subjective well-being has for a long time been examined in relation to individual socio-economic characteristics, like education, health, material conditions and social relations (Layard 2006, Dolan et al. 2008). Many authors have also stressed the importance of the local environment and the quality of public services (Aslam and Corrado 2012), although the influence of local conditions on well-being has been documented mostly at high levels of aggregation (countries or large sub-national regions; Perovic and Golem 2010; Colombo et al. 2018). Principally, though, the combined implications of local conditions and the material situation at the individual level on well-being remain largely underexplored. In our study we explore granular local conditions at the level of municipalities, allowing us to examine the relationship accounting for significant within-country differences in a shared institutional framework. Such disaggregation seems especially important in analysing the quality of life of the older population due to the likely relevance of local health and care services, high-quality transport options, local safety, green spaces and other public services.

Individual and Local Factors

To examine the direct and moderating roles of local conditions on well-being and their relation with income, we rely on a combination of individual- and local-level data (for methodological details, see Myck et al., 2025).

The individual-level data comes from the Polish part of the Survey of Health, Ageing and Retirement in Europe (SHARE). This dataset provides detailed information on health, labour market activity, material situation and social relations of individuals aged 50 years and above for almost all European countries. In addition to the usual socio-demographic information (age, gender, education, marital status, and income), SHARE collects several self-reported measures of physical and mental health, as well as a number of broad dimensions of quality of life. One such measure is CASP, which aims to capture the quality of life among older individuals in four important dimensions:  Control, Autonomy, Self-realisation and Pleasure. With twelve questions (three for each dimension), each participant evaluates how often they feel in a certain way or experience certain situations. The final outcome is a summed score in the range of 12 to 48, with higher values indicating a higher quality of life.

For the purpose of our analysis, the individual dataset has been augmented with regional-level information. To capture as much variation in the quality of local conditions as possible, we rely on 14 indicators collected either at the municipal or county level (respectively, the bottom and middle tiers of the administrative division of Poland). They represent the quality of localities in terms of economic factors, housing infrastructure, green spaces and health services. Given the high correlation between these regional variables, they have been combined into a single local quality index using principal component analysis (PCA). The index is calculated on the municipality level, with higher values representing better quality of local conditions. Figure 1 below shows the spatial distribution of the index across all Polish municipalities, highlighting significant regional differences in the local quality of life in Poland, particularly between the Western and Eastern parts of the country.

The Role of Income and Local Conditions for Individual Well-being

We examine the relationship between well-being, contemporaneous household income, and local conditions in a panel random effects regression, controlling for an extensive vector of covariates. Our results confirm a strong positive association between income and well-being, with a 100 per cent increase in disposable income corresponding to increases of up to 0.66 points on the CASP scale. While this may seem small, given the scale of the CASP measure, the effect is similar to that of being employed relative to being retired (0.56 CASP points), married relative to being widowed (0.78), and very close to the average difference in CASP between men and women, conditional on other controls (0.57).

Figure 1. Distribution of the index capturing the quality of local conditions at the municipality level in Poland

Note: Municipality borders are in white, regional borders in yellow. Source: Myck et al. (2025).

We also find that the regional index is positively correlated with well-being. Importantly, though, since income and the quality of regional conditions are strongly correlated, we examine the importance of their interaction in the well-being regression. This facilitates the investigation of the differential reaction of well-being to income for different values of the index (and vice versa). In Figures 2a and 2b we present average marginal effects of each one of the variables as calculated at different percentile levels of the other.

The results indicate noticeable variation in the strength of the association between income and well-being, depending on the quality of local conditions (Fig. 2a). Income seems to matter little at the lower end of the distribution of the regional index and much more in localities of better quality.

Figure 2. Average marginal effects (AME) of income and the regional index on well-being

a) AME of log(Income) across distribution of the regional index

b) AME of the regional index across the distribution of log(Income)

Note: Figures show point estimates of AMEs and the corresponding 90% confidence intervals. Well-being is measured with a CASP score of 12-48. Source: Myck et al. (2025).

While the growing role of income as local conditions improve might seem surprising, it well aligns with the fact that consumption of some publicly provided goods and services is dependent on or related to income: apart from the obvious examples such as culture, more important dimension of access to public services might relate to the areas where rich and poor people live, the quality of public transport and easy access to highly localized public services.

Strong positive effects of regional quality on well-being are also observed among respondents with the highest incomes (Fig. 2b). The association for low-income individuals cannot be statistically differentiated from zero.

Conclusion

The results of our study suggest that for high-income older individuals in Poland, better local conditions are reflected more strongly in their well-being compared to that of low-income residents. For the poorest older individuals, improvements in local conditions have little or no bearing on their well-being. At the same time, increases in income are associated more strongly with well-being in areas with the highest levels of quality of local conditions.

The policy implications of our results thus highlight the detrimental consequences of the combination of low income and poor quality local conditions for individual well-being and the challenges to improving the latter. Our results suggest that effective policies aimed at increasing the well-being of older adults require a careful combination of direct and indirect measures, or otherwise a combination of support focused on income transfers with provision of, and better access to, the relevant range of public goods and services.

Our results also point towards targeted rather than simple universal income transfers: greater income increases are needed in low-quality areas compared to top-quality ones to secure the same change in well-being. Moreover, the fact that local quality translates differently into well-being for the rich and the poor suggests that there are significant disparities in access to local services by income level. This, in turn, calls for developments in access and mobility opportunities and investments in local public services to ensure better access to these services among low-income residents. Local policies in high-quality areas should become more sensitive to the needs of poorer older inhabitants, while improvement of local conditions in low-quality regions needs to accompany direct transfer policies for these to effectively translate into a higher quality of life of older individuals.

Acknowledgement

The authors acknowledge the support from the Swedish International Development Cooperation Agency, Sida.

The original study (Myck et al. 2025) was financed through a joint grant of the Polish National Science Centre (NCN, project no: 2018/31/G/HS4/01511) and the German Research Foundation (DFG, project no: BR 38.6816-1) in the international Beethoven Classic 3 funding scheme (project AGE-WELL).

References

  • Alesina, A., Di Tella, R. and MacCulloch, R., 2004. Inequality and happiness: are Europeans and Americans different? Journal of Public Economics, 88 (9–10), 2009–2042.
  • Aslam, A. and Corrado, L., 2012. The geography of well-being. Journal of Economic Geography, 12 (3), 627–649.
  • Colombo, E., Rotondi, V. and Stanca, L., 2018. Macroeconomic conditions and well-being: do social interactions matter? Applied Economics, 50 (28), 3029–3038.
  • Myck, M., Oczkowska, M. and Kulati, E., 2025. Income and well-being in old age: The role of local contextual factors. The Journal of the Economics of Ageing, 30, 100551.
  • Perovic, L. M. and Golem, S., 2010. Investigating Macroeconomic Determinants of Happiness in Transition Countries: How Important Is Government Expenditure? Eastern European Economics, 48 (4), 59–75.
  • Rossouw, S. and Pacheco, G., 2012. Measuring Non-Economic Quality of Life on a Sub-National Level: A Case Study of New Zealand. Journal of Happiness Studies, 13 (3), 439–454.

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Towards European Union Membership: Poland’s EU Pre-accession Funds and Infrastructure Development

Posted on October 6, 2025 | Policy Brief, Policy Papers

European Union flag waving during a public demonstration, symbolizing support and integration efforts related to EU Pre-Accession Funds.

In advance of formal membership, candidate countries are offered three pillars of EU assistance: trade concessions, stabilization and association agreements and financial support. These instruments aim both to prepare candidates economically, politically and administratively, and to signal accession’s benefits to their populations. In this paper we describe the channels in which the third pillar – the EU pre-accession funds – affected Poland’s economic and institutional development ahead of its 2004 membership. The funds were designed to accelerate institutional transformation, modernize agriculture, strengthen rural communities, improve transport networks, and promote environmental protection. In Poland, between the mid-1990s and 2003, they supported extensive investments that produced unprecedented improvements in technical infrastructure. Poland’s accession referendum in 2003 turned decisively in favor of EU membership, despite strong regional variation in support. While no causal evidence is available, we argue that without the EU-funded infrastructural transformation, its outcome would have been less certain. For current EU candidate countries, Poland serves as an excellent example of how targeted external financial assistance can support structural transformation ahead of integration with the EU.

Introduction

Seven countries are currently eligible to receive financial support through the European Union’s Instrument for Pre-Accession Assistance (IPA III): Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia, and Türkiye. The funding allocated within the program for the 2021–2027 period amounts to 14.162 billion EUR (in 2021 prices; European Commission, 2024). IPA III is the successor to the former two IPA editions, which have provided support exceeding 24 billion EUR since 2007 to countries in the then EU enlargement region. IPA aims to support countries that have entered a pathway to EU membership, expected in the foreseeable future, to facilitate progressive alignment with EU rules, values, and various standards and policies enforced in the European Union before they become full members. It constitutes one of the pillars of assistance offered by the EU to countries with a prospect of membership, with trade concessions and stabilization and association agreements (SAAs) serving as the other two.

Next in line to obtain financial help through the pre-accession funding are Moldova and Ukraine, both of which were granted candidate status by the European Council fairly recently. While they have already started their accession negotiations and may benefit from trade concessions and SAAs, they still need to fulfill certain requirements to be eligible for IPA. Though formally also a candidate since late 2023, the accession process of Georgia is currently suspended due to concerns about democratic backsliding, implementation of controversial laws and disputed parliamentary elections.

In this paper, we examine Poland’s experience in utilizing the funding available prior to the 2004 EU enlargement to undergo important structural and systemic changes. Given the goals of the funding, we discuss the evolution of a number of economic indicators which can serve as evidence of the socio-economic advancement that occurred in Poland in the years leading to its EU accession. These examples illustrate different dimensions of development that societies in countries embarking on the EU accession process could benefit from on their way towards full integration.

EU Pre-accession Funding Options in the 1990s

Together with nine other countries, mainly from the Eastern European region and the former communist bloc (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Slovakia, and Slovenia), Poland joined the EU in 2004. It was the largest enlargement of the European community both in terms of the number of new countries and population-wise.

On the pathway to EU membership, these candidates benefited from a coordinated set of financial instruments designed to accelerate their political, economic, and institutional development. During the 1990s and early 2000s, three programs offered financial assistance: Phare, SAPARD, and ISPA. Each addressed a different strategic challenge that candidates faced during their accession period – many of which underwent the transition from centrally planned to free market economies.

From the pool of soon-to-be EU members, Hungary and Poland were the first among the post-communist Central and Eastern European countries to formally start the accession process as early as 1994 (Cyprus and Malta applied in 1990). These two countries also inaugurated the distribution of financial assistance among the EU applicants. They became the first beneficiaries of the Phare program, which concentrated on supporting public administration reform, improving institutional capacity, and preparing regions for effective absorption of EU structural funds. It also helped modernize local infrastructure and provided targeted assistance to sectors undergoing major restructuring. Phare was soon extended to cover all other candidate countries.

The second initiative – SAPARD, concentrated on the needs of the agricultural sector and rural communities. The goal was to raise the competitiveness of local farming and modernize food production.

The third program, ISPA, funded major environmental and transportation initiatives.

These three programs helped close the gap between the candidate countries and older EU member states by improving infrastructure and enhancing the functioning of their institutions. Formally, they also helped ensure that the new members met EU strict standards and legal directives and built the foundations for their long-term cohesion. More detailed descriptions of the objectives of each program, with a special focus on Poland, are included in Box 1.

Figure 1 presents the annual expenditures between 1990 and 2003 within each of the three analyzed instruments provided by the European Union to Poland (bars, left axis). With connected lines, we show the scope of each program in cumulative amounts over time (right axis). During the 1990s, the budget spent on Poland under the Phare program was kept under 200 million EUR annually (in the last year of the decade, it increased to almost 300 million EUR). However, after the program’s restructuring since the beginning of the 2000s, annual spending through this instrument doubled. Among the three, Phare was the major funding source for Poland, as the country received a total of 3.5 billion EUR until 2003 (equivalent to 1.9% of the Polish GDP in 2003) – almost five times more than under the SAPARD program. Poland also obtained the highest total amount of funding of all candidate countries at the time, corresponding to 30% of the overall provided financial assistance (Kawecka-Wyrzykowska & Ambroziak 2006).

Figure 1. Values of  EU pre-accession funds in Poland

Source: Own compilation based on Tables 3, 4, 6 from Kawecka-Wyrzykowska & Ambroziak (2006). Note: in 2003 prices.

In 2000, ISPA and SAPARD were introduced to further support specific areas identified during the 1990s as critical and requiring targeted funding – the agricultural sector, initiatives to enhance the transportation network, and environmental protection. Through SAPARD, projects related to farming and rural infrastructure received approximately 150 million EUR per year in Poland, accumulating to 700 million EUR over the four-year period until 2003. Since one of the prerequisites in SAPARD was national co-funding of ca. 25% of the public contribution in the investments, overall 1.1 bn EUR (0.6% of the 2003 GDP) of public money was committed to different projects in Poland through this instrument (ARiMR 2025; investments consisted in 50% of private resources).

Projects supported within ISPA on average obtained 300 million EUR annually in Poland, with total spending reaching 1.4 billion EUR until 2003 (0.8% of the 2003 GDP). Poland was still the major beneficiary of these two types of financial support, though the total share of the funding received within each of them was much lower than in the Phare program, respectively 32% in SAPARD and 34% in ISPA (Kawecka-Wyrzykowska & Ambroziak 2006).

 

Box 1. Financial instruments offered in the 1990s on the pathway to EU membership: Phare, SAPARD, ISPA

Originally known as Poland and Hungary Assistance for Restructuring of the Economy, Phare was launched in 1989 at a pivotal moment in European history. Initially designed to support the two countries in their transition from communism to democracy and a market economy, Phare quickly expanded to cover other parts of Central and Eastern Europe. Its mission was not only to help rebuild economies, but also to support political democratization. At first, it operated through national programs, but as regional cooperation gained importance, Phare introduced international initiatives to foster cross-border collaboration. The evolving challenges faced by the transforming countries led to a significant change in the program’s operation in the late 1990s. Financial support was now focused on two main pillars: investment in essential infrastructure, which consumed about 70 per cent of resources, and institutional development, which received the remaining 30 per cent. Poland benefited from several specialized initiatives within Phare. Socio-Economic Cohesion focused on modernizing regional infrastructure and preparing Polish regions to efficiently absorb EU structural funds. Cross-Border Cooperation strengthened ties between Poland and its neighbors. Institutional Building contributed to more efficient and transparent public administration.

The Special Accession Program for Agriculture and Rural Development, SAPARD, was established in 1999 to help transform the agricultural sectors and rural economies of ten countries aspiring to join the EU at the time. The goal was to prepare farmers and food processors to meet strict EU sanitary and veterinary standards. In Poland, SAPARD played a major role given the country’s vast rural landscape and the important role of agriculture in the economy – accounting for 7% of the GDP in 1995 (CSO 2014). Around 75% of the total budget was allocated from EU funds, with the remainder covered by national co-financing. However, the rules required an own contribution from each beneficiary, thus around half of the total value of all investments realized through SAPARD was private capital (Supreme Audit Office, 2002). SAPARD in Poland focused on, on the one hand, the modernization of agriculture and, on the other, on rural development. A large part of the program went into modernizing agricultural holdings, supporting farmers in buying new machinery, improving farm buildings, and upgrading agricultural production to meet EU standards. Equally important was the modernization of food processing industries, like meat, dairy, fruits and vegetables. Another significant part of the program concentrated on infrastructure in rural communities — building roads, sewage systems, and improving basic services. To encourage economic diversification, assistance was provided to develop non-farming businesses and create new job opportunities outside of agriculture (EU Council, 1999a).

Created in 1999, the main goal of ISPA was to finance large-scale projects in two critical sectors: transportation and environmental protection. Projects selected for funding were typically expensive, exceeding 5 million EUR, and had a strategic, national or at least regional impact (EU Council, 1999b). From the society’s perspective, these initiatives improved living standards, protected public health and the natural environment and promoted sustainable development. In the environmental sector, ISPA focused mainly on critical areas, including improving the quality of drinking water, building modern sewage treatment plants, managing waste more efficiently, and reducing air pollution. Given the EU’s strict environmental directives, addressing these issues was a fundamental condition for accession. ISPA concentrated also on modernizing and expanding major roadways and railway lines, especially those which were signified as part of the Trans-European Transport Network. Improved transport connections facilitated trade, mobility, and regional development, essential for increasing economic competitiveness and tightening of physical linkage with the rest of Europe.

The total amount of received funding was only one of the factors that may have played a role in the scope and pace of overall socio-economic changes in Poland. Importantly, the spatial distribution of investments provided a unique opportunity to reduce the geographical inequalities deeply rooted in Polish history and related, in particular, to the partitions of Poland lasting from the late 1700s till the end of World War I (Becker et al. 2016; Grosfeld & Zhuravskaya 2015). The eastern regions of Poland were historically much less developed, with the agricultural sector maintaining a critical position in economic activity and employment.

To illustrate the differences in regional distribution of the funding, we use a number of indicators related to investments realized with the help of the SAPARD instrument – which was specifically targeted at supporting infrastructure in rural areas and advancements in the agricultural sector. In Figure 2, we present three measures of investment allocation – the total (public+private) value of investments completed in each region (a), total value of investments per capita (b), and per hectare of agricultural land (c). Depending on the analyzed indicator, we obtain a slightly different picture of the distribution of the investments in SAPARD throughout the country. It appears that the Western regions of Poland received the least funding from SAPARD, whereas the Eastern and most rural regions were less successful in securing the funding. In all three cases, though, the Wielkopolskie Voivodship – a region in the Central-Western part of Poland – stands out as the one that collected the highest funding not only overall, but also when calculated per inhabitant or, most crucially, per area of agricultural land.

Figure 2. Spatial distribution of the SAPARD investments in Poland, total amount (public+private) for the period 2000-2003

Source: Own compilation based on Table 7.2 from Rudnicki (2008). Note: Converted from PLN to EUR using 4PLN/EUR exchange rate; c) per hectare of agricultural land. As compared to Fig. 1 the amounts for SAPARD include private resources spent

The most likely reason behind the particular allocation of the funding is related to the application process. The total amount of the funding was granted to Poland with limited distributional guidelines, and the funds were allocated on the first-come, first-served basis (ARiMR 2003). The maps in Figure 2 suggest that farmers, agricultural producers and manufacturers, and rural municipalities in Wielkopolskie region were quick and efficient when it came to funding applications. The scale and scope of the investments, though – looking at the three different measures – shows the flow of substantial benefits to all central and eastern regions.

Infrastructural Metamorphosis of Poland in the 1990s

As described above, an exceptional stream of additional funds from the EU was directed to Poland from the early days of its transition. The funding programs evolved with time during the 1990s and became more specialized closer to EU accession to address the specific needs of the candidate countries. While causal evidence of the impact of EU pre-accession funds on evolving infrastructure remains scarce and is methodologically challenging (with just a few exceptions on more recent pre-accession funding schemes, like Denti 2013), a simple overview of a number of key indicators might serve as strong suggestive evidence that the funds actually made a significant difference. In this part of the paper, we take a closer look at some examples of Polish infrastructure that underwent enormous progress in the late 1990s and early 2000s. We stipulate that the EU funding played a crucial role in the acceleration of this development.

All three analyzed EU instruments – Phare, SAPARD and ISPA – shared some common objectives, for instance, increasing access to clean water in the population, reducing pollution in lakes, rivers, and the sea, and improving road conditions, especially the low-rank ones in remote, rural areas. In Figures 3-5, we present the scale of improvement observed in these three areas on the lowest level of regional disaggregation, namely, in Polish municipalities. We compare the three selected indicators over almost a decade, between 1995, the initial year of data availability, and 2004.

We begin with Figure 3, which depicts the expansion of the water pipe network measured in kilometers per 1,000 inhabitants in each municipality. As specified in the legend, the darker the green category, the higher the density of the water pipe network. The rapid expansion of the network between 1995 and 2004 is evident, especially in some parts of the country. Most often, the upgrade to the top category happened in regions that lagged well behind the rest of the country in 1995. Here, the notable examples are the central regions of Poland (Kujawsko-Pomorskie and Lodzkie Voivodships, including the northern part of the Mazowieckie Voivodship) and the north-eastern frontiers (Podlaskie and Warminsko-Mazurskie Voivodships).

Figure 3. Length of the water pipe system (in km) per 1000 inhabitants in Polish municipalities in 1995 and 2004

Source: Own compilation based on the statistics from the CSO Local Data Bank (BDL); Geodata: National Register of Boundaries (PRG). Note: The legend is based on 2004 data: the two top and bottom categories in the legend cover 10% of observations each, and the rest of the categories cover 20% of observations each. Municipality borders marked in white, voivodship borders in yellow. Poland underwent an important administrative reform in 1999, when 49 voivodships were aggregated into the current 16. For the year 1995, we use the post-reform voivodship division of the country. Between 1995 and 2004, only negligible administrative changes took place at the municipal level.

In Figure 4, we show the share of the population enjoying access to sewage treatment plant services. The progress over time in this respect was related, on the one hand, to the construction of new treatment facilities and, on the other, to the concurrent expansion of the sewage pipeline network, which resulted in a higher share of users for the existing wastewater treatment plants. The increase in the usage of the treatment plants over time is striking, especially given that at the starting point, in 1995, only a limited number of municipalities had a wastewater treatment plant in operation. These municipalities were mainly concentrated in the northwestern corner of Poland and in the southwestern region of Silesia.

In comparison to the water pipe system in Figure 3, the development of sewage treatment plant access was concentrated in regions that were already ahead of the rest of Poland in 1995 – specifically, the northwestern and southwestern ones. However, a substantial increase in access to sewage treatment services is also visible in central and eastern parts of Poland, where in 1995 plants offering these services were extremely rare. This particular type of development can also be viewed from the perspective of the extent of pollution reduction in Poland’s internal waters. The number of scientific reports documented a sharp decline in biochemical factors of industrial, agricultural and household origin, hazardous to both humans and the environment, commonly polluting Polish rivers and lakes in the 1990s (Gorski et al, 2017; Marszelewski & Piasecki, 2020).

Figure 4. Number of residents connected to sewage treatment plants per 1000 inhabitants in Polish municipalities in 1995 and 2004

Source: see Figure 3. Note: The legend is based on 2004 data: due to high prevalence of zeros the bottom category in the legend covers 30% of observations, the rest of categories cover 10% of observations each. Municipality borders marked in white, voivodship borders in yellow (see Notes in Figure 3 for details).

The third pair of maps (Figure 5) illustrates the development of the country’s road network. The Figure shows the expansion and modernization of the lower rank roads administered by municipalities, which seem particularly important from the point of view of day-to-day transportation and quality of life of local populations.

Figure 5. Length of the municipality road network (in km) per 1000 inhabitants in Polish municipalities in 1995 and 2004

Source and Note: see Figure 3.

The data in Figure 5 cover both paved or hard-surfaced roads and dirt roads. One point to keep in mind here is that with an overall development of a municipality and of the neighboring region, the status of the municipality’s small-scale road may be updated to a higher rank, administered by the county or even by the voivodship. Figure 5 does not account for such an update of rank (in the Figure of roads), so the numbers presented are likely to represent a lower bound of the actual advancement. The maps in Figure 5 compare the length of municipal roads per 1000 inhabitants in 1995 and 2004. While a significant improvement in the road system is visible almost all over the country, the central regions seem to have gained the most, at least when it comes to this particular type of roads.

Investments and Development vs. Public Perception

Overall, all three figures above demonstrate that during the decade before Poland integrated with the EU, significant progress was achieved in terms of improving the quality of life, increasing accessibility of public utilities, reducing environmental degradation and capturing sustainable urban development. Substantial investments in rural areas had an important impact on reducing regional disparities.

Another important observation when examining all three figures together is that, while advancement occurred throughout the country, the bulk of improvement in each of the considered aspects was concentrated in slightly different parts of it, and almost all Polish municipalities recorded an important inflow of investments related to the pre-accession funding. While again we cannot provide any causal evidence, below we confront the spatial distribution of infrastructural modernization from Figures 3-5 with public support for joining the EU expressed in the referendum organized in 2003, a year before accession.

Figure 6. Support for the EU accession in the referendum in 2003

Source: Own compilation based on the statistics from the National Electoral Commission; Geodata: National Register of Boundaries (PRG). Note: The bottom category in the legend covers municipalities that voted against EU integration (12.3% of observations), the rest of the categories cover 25% of the remaining observations each. Municipality borders marked in white, voivodship borders in yellow.

In Figure 6, we present the results of the vote on the municipal level, with darker blue shades indicating higher support for EU membership. The map clearly highlights high geographical variation in support for European integration, with much stronger proportions of votes in favor of EU membership in western and northern Poland. In contrast, the support in central and eastern Poland was substantially lower, reflecting a higher degree of skepticism towards the benefits of the EU. Clearly, many factors influenced people’s choices at the time of the referendum. They depended on their economic conditions, the degree of exposure to relations with Western European countries, the level of awareness of the potential gains from integration, as well as fears concerning the future of local economies and those related to cultural influences.

Just by looking at the map of support, it is impossible to say much about the degree to which the EU pre-accession funds affected the outcome of the referendum. For that, we would need to know more about the dynamics of support across regions. Yet, while the share of votes in favor of integration in many eastern municipalities was below 50%, people in a substantial majority of localities expressed overwhelming support for joining the EU. The result of the referendum was 77,45% in favor. Although no causal analysis linked the results to EU pre-accession funds, the scale of investment and its visibility, as well as its tangible effects – the direct translation of EU funds into daily quality of life all across Poland, are very likely to have turned many people’s votes in the EU’s favor.

Conclusion

Since the early 1990s, on the path to EU membership in 2004, Poland, like other candidate countries, received generous European pre-accession financial assistance. The combination of three financial instruments in operation at the time – Phare, SAPARD, and ISPA – enabled Poland to make substantial investments in key economic sectors, including public administration, agriculture, environmental protection, and physical infrastructure. The early launch of the Phare program prepared Poland to follow various EU standards and prerequisites, and contributed to the implementation of the cohesion policy. Initiation of assistance within SAPARD and ISPA instruments since 2000 strengthened the rural economy and competitiveness of Polish agriculture, and allowed for modernization of the transportation and environmental infrastructure. In pre-accession assistance, Poland received a total of 5.5 billion euro (over 3% of the 2003 GDP), by far the highest support provided to the candidate countries at the time.

Substantial investments made during the 1990s and early 2000s, largely covered by pre-accession financial aid, had a remarkable impact on the quality of existing infrastructure in Poland. Kilometers of roads were built and renovated in Polish municipalities, thousands of households acquired a connection with the water pipe network, and hundreds of wastewater treatment plants were constructed. This is only a small subset of selected advancements that can be demonstrated using quantitative data collected in a comparable way over time. Numerous other types of infrastructure received substantial investments to support development, modernization or enhancement. On top of that, all these improvements have likely contributed to further spill-over effects through higher levels of regional growth, a boost in the labor market with the creation of new jobs, a reduction of unemployment, or enhanced labor productivity. All these changes, taken together, played a key role in determining the overall quality of life for the Polish population, reducing regional economic inequalities, and improving the quality of the local natural environment, etc.

The distribution of support for Poland’s accession to the EU, as reflected in the 2003 referendum results, differed significantly by region. Enthusiasm for the EU was significantly lower in the eastern parts of the country, while residents of many western municipalities voted overwhelmingly in favor of membership. Yet, even at a very fine geographical distribution, we see only a relatively small group of municipalities – 12.3% – where less than 50% of residents voted in favor of EU membership, and the overall outcome across the country was a decisive “YES”. Thus, although the substantial advancement in infrastructural development all across the country did not convince the majority of residents in each and every locality, the number and geographical scope of those voting in favor was very decisive. It is impossible to say how high/low the support would have been without the received support. Yet, given the scale of the resulting changes in various basic dimensions of quality of life, it seems safe to say that, thanks to the funds, many voters looked at the future integration with a higher degree of appreciation. Naturally, other factors played a role in determining people’s decisions in the referendum, with economic conditions and prospects for socio-economic development being just one factor, albeit a likely important one.

Pre-accession funds in the current candidate countries, how they are used, distributed, and how they change people’s daily lives, will again prove important in showcasing the benefits of integration. At the same time, to secure the kind of support that the Polish population expressed in the 2003 referendum, it will be important to also highlight the broader benefits of integration and address fears and concerns of various population groups.

The experience of Poland and other member countries from Central and Eastern Europe can serve not only as an example of the benefits of pre-accession funds, which we studied in this policy paper. The countries’ socio-economic success and the changes in the quality of life, both before and after accession, should be seen as a clear case of fundamental changes, which would have been highly unlikely had the countries decided to stay out of the European Union.

Acknowledgement

The authors acknowledge the support from the Swedish International Development Cooperation Agency, Sida. We are grateful to Patryk Markowski for his assistance in preparing this analysis and detailed background research.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

The Polish Presidential Elections 2025: Can the Democratic Coalition Complete Their 2023 Victory?

Posted on May 26, 2025 | Policy Brief

Presidential Palace, Warsaw, Poland - representing the Polish Presidential Elections 2025.

It is safe to say that the outcome of the second round of the Polish presidential elections, scheduled for June 1, 2025, will determine the potential for significant structural reforms in the country in the coming years. The two candidates are: Karol Nawrocki, officially declared as a ‘civic candidate’ (though for all practical purposes associated with the previous government’s Law and Justice party, Prawo i Sprawiedliwość – PiS), and Rafał Trzaskowski representing the main coalition party in the current government, the Civic Platform (Platforma Obywatelska), which came to power after the parliamentary elections in October 2023. In the first round of the 2025 presidential election, which took place on May 18, 2025, Rafał Trzaskowski came first with 31.4 percent of the votes and Karol Nawrocki second with 29.5 percent. This policy brief explores the mechanisms through which the Polish President can influence current policy, using past economic initiatives as illustrative examples. It also examines the results of the first round of the election in greater depth and highlights key areas where reforms would likely face significant obstacles, were Karol Nawrocki to win the decisive second round.

What Can the Polish President Do?

Although elected in a popular vote, the Polish President’s power in terms of influence on policies is highly limited. The President acts as the Supreme Commander of the Armed Forces of the Republic of Poland and is officially responsible for representing Poland on the international arena. However, most of the executive power in Poland lies with the government, which in turn requires the support of the Parliament.

That said, the past ten years of Polish politics—the years under the outgoing President Andrzej Duda—have shown that a government with only a narrow parliamentary majority can be highly dependent on the President. Its effectiveness may be either enhanced by a cooperative President or significantly constrained through the use of the presidential veto on legislative initiatives.

Andrzej Duda, who was picked as a surprise candidate to represent the Law and Justice party—in a similar manner to Karol Nawrocki today— won the elections in 2015. He facilitated a series of destructive reforms in the areas of the judiciary, education, and the labor market in the years Law and Justice party headed the government; later he blocked many of the current government’s efforts to reverse those policies.

The outcome of the vote on June 1, 2025, will therefore be crucial for the prospects of a clear return to democratic standards in Poland, and for the deeper structural reforms needed to place the Polish economy on a long-term development path. The winning candidate will also either facilitate coordinated efforts in international policy and joint European initiatives, or act to obstruct the current government’s actions in this area—including key policies related to support for Ukraine.

The President’s Influence on Economic Policy: Electoral Promises vs. Implementation

The limited executive power of the Polish President does not stop the candidates from coming forward with rich electoral programmes. These cover many areas outside of the President’s direct sphere of influence, including economic policies.

Using Andrzej Duda’s presidency as an example, it seems that while some of these are eventually implemented (although typically not without political frictions involving the Parliament) others tend to be more of electoral slogans than areas of real concern:

In 2015, Andrzej Duda campaigned on two major economic initiatives: lowering the retirement age and substantially increasing the main income tax allowance. In the first case, he came forward with a legislative proposal to the Parliament almost immediately after being elected, aimed at restoring the lower retirement age of 60 for women and 65 for men. Although the government had campaigned on the same reform before taking office, the Parliament froze Duda’s initiative for a year in an effort to introduce less drastic changes to pension eligibility criteria. Eventually, political considerations and the weight of the 2015 electoral promises prevailed. As a result, Poland is the only EU country with as big as a five-year gap in the retirement age between men and women. The electoral tax reduction proposal was, however, quickly abandoned. As shown in a recent commentary (Myck et al. 2025a), Duda not only failed to deliver on this promise but, over his ten-year presidency, largely ignored tax policy altogether—both in terms of initiating legislation and engaging in public debate on fiscal matters.

Initiatives by earlier presidents also show that while Polish presidents are always dependent on the Parliament, they can exert some influence over economic policy. For example, Bronisław Komorowski (in office 2010-2015) put forward a legislative initiative to change tax regulations for families with children, which the government later took on board. While the government’s implemented regulations differed from Komorowski’s proposal, they were still in line with his objectives (Myck et al. 2013).

These examples clearly illustrate that the success of any initiative from the president’s office ultimately depends on the parliamentary majority the President is able to mobilize. Based on the electoral promises of this year’s top candidates, such a majority seems highly unlikely regarding one of the major electoral promises of Law and Justice’s candidate, Karol Nawrocki. Nawrocki has proposed a substantial income tax reduction for families with 2 or more children, designed in a way that would heavily benefit the richest families (Myck et al. 2025b). The reform is estimated to cost about 19bn PLN (0.5 percent of GDP) per year, with over 60 percent of the total amount benefiting families in the top income quintile. Such a measure is extremely unlikely to gain support not only from the current government, but also—given its distributional consequences—from within Nawrocki’s own political base. One way to interpret this is that much like the deep tax cuts proposed by Andrzej Duda in 2015, Nawrocki’s tax proposal bears the hallmarks of a simple and appealing campaign slogan that is likely to be forgotten, whether or not he wins the election.

The First Round Results and Final Vote Prospects

While Rafał Trzaskowski placed first in the initial round of voting on May 18, 2025, the difference between the top two candidates came down to only 1.8 percentage points. This suggests a very close race in the second round and intensive electoral campaigning in the days leading up to the election. How close the runoff will be depends on the split of votes among those who supported other candidates in the first round, as well as their participation levels in the second round.

In the first round the top seven candidates collected 96.1 percent of the votes in total. Two candidates representing the current coalition parties received 5.0 percent (Szymon Hołownia) and 4.2 percent (Magdalena Biejat) of the votes, respectively. Two other main right-wing candidates collected a combined 21.2 percent: Sławomir Mentzen (Konfederacja party) received 14.8 percent, and Grzegorz Braun (Wolność party) received 6.3 percent. Adrian Zandberg, representing the left-wing opposition (Razem party), received 4.9 percent.

If those who voted for the government coalition candidates fully shift their votes to Trzaskowski in the second round, he could count for about 40.6 percent of the vote – still far short of the necessary majority. To secure the win, he would need to collect some support from both the left and the right. However, it is unlikely that voters in either of these cases unilaterally shift support to one of the top candidates.

As shown in Figure 1 below the main candidates will have to make strong appeals to the youngest voters (aged 18-29), the majority of whom supported Mentzen (34.8 percent) and Zandberg (18.7 percent). Trzaskowski is more likely to attract support from women and better educated voters. Based on the results of the first round, Nawrocki, can count on voters with less than tertiary education and on slightly more votes from men. While Biejat and Hołownia have already publicly endorsed  Trzaskowski, the other candidates have so far refrained from making any declarations of support.

The public debate ahead of the second round is likely to focus on military and economic security, migration and support for Ukraine (including its refugee population in Poland). The final round of the 2025 presidential race in Poland is likely to be extremely close and highly polarising.

Figure 1. Poll results from the first round in the Polish Presidential Elections 2025, by demographics

Source: TVP info. Note: Late poll results by IPSOS, based on the results from 90 percent of the polling stations.

Completing the 2023 Parliamentary Victory

The democratic, pro-European coalition that won a parliamentary majority in October 2023 has so far only been partly successful in restoring the rule of law and a functioning system of checks and balances after their dismantling by the previous government. Other electoral promises from 2023—such as the liberalization of abortion rules, legislation on same-sex partnerships, and reform of the public media—remain to be implemented.  The government implemented some important changes in the public media and judiciary, but broader reforms were either vetoed by President Duda or postponed due to the likelihood of his opposition.

On a number of occasions Duda also used a procedure called ‘preventive control’. Under such procedure, legislation is sent to the Constitutional Tribunal before the President decides whether to sign it or not. Since the Constitutional Tribunal has been central to controversies over judicial reforms introduced by the previous government, such decisions are simply another form of delaying the implementation of new legislation. There is thus little doubt that Rafał Trzaskowski’s victory on June 1st, 2025, is essential for the current government. It would enable reforms crucial for the return of the rule of law, for bringing back the Polish legal system in line with decisions of the European Court of Justice, and for advancing other major reforms in public media, women’s and minority rights, and more. From this point of view Karol Nawrocki’s win on June 1st, 2025, is key for the parties of the previous government, to stop these fundamentally important reforms.

The current government is facing important challenges in many policy areas and effective  cooperation with the new President will be fundamental. Given the current level of government debt and high budget deficits, it will have to take significant steps to consolidate public finances. At the same time, it has committed to increasing spending on healthcare and education, while maintaining one of the highest levels of military spending among NATO countries.  The government must also handle the challenges of demographic ageing and migration flows – all in the context of the continuing Russian aggression in Ukraine, and the overall global uncertainly. Even with strong presidential support, tackling all these issues will be challenging.Facing them under an antagonistic Head of State—in the case of Nawrocki’s victory—would not only make the government’s task significantly harder, it with also have serious implications for medium-term political stability in Poland and potentially other European countries.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

From Integration to Reconstruction: Standing with Ukraine by Supporting Ukrainians in Sweden

Posted on April 7, 2025 | Policy Brief

People gathered in Sweden showing solidarity and supporting Ukrainians with national flags.

Sweden has strongly supported Ukraine through both public opinion and government actions, yet there has been little discussion about the needs of Ukrainian displaced people in Sweden. The ongoing war and the rapidly shifting geopolitical landscape have created uncertainty – geopolitical, institutional, and individual. Ukrainian displaced people in Sweden face an unclear future regarding their rights, long-term status, and opportunities, making future planning or investing in relevant skills difficult. This uncertainty also weakens the effectiveness of integration policies and limits the range of policy tools that can be deployed, which hinders participation in the labor market, affecting both displaced and employers. Addressing these challenges is essential, not only for the well-being of Ukrainians in Sweden, but also for Sweden’s broader role in supporting Ukraine. Helping displaced Ukrainians rebuild their lives also strengthens their ability to contribute both to Swedish society and to Ukraine’s future reconstruction and integration into Europe.

The Swedish Approach to Displaced Ukrainians

In response to the Russian full-scale invasion of Ukraine, the Temporary Protection Directive (2001/55/EC) (commonly referred to as collective temporary protection) was activated in March 2022, granting Ukrainians seeking refuge temporary protection in EU countries, including Sweden. This directive provides residence permits, access to work, education, and limited social benefits without requiring individuals to go through the standard asylum process.

However, the practicalities of the Directive’s use differed significantly between countries. Sweden, despite its, until recent, reputation of being relatively liberal in its migration policies, has at times, lagged behind its Scandinavian neighbors in supporting Ukrainian displaced people. To illustrate this, it is useful to compare the Swedish approach to that of other Nordic states, as well as Poland.

Comparison to Other Nordic States

The Nordic countries have implemented the directive in different ways, adopting varying policies toward Ukrainians demonstrating different degrees of flexibility and support. Despite its generally restrictive immigration policy, Denmark introduced some housing and self-settlement policies for Ukrainians that were more liberal than its usual approach. Norway also initially introduced liberal measures but later tightened regulations, banning temporary visits to Ukraine and reducing financial benefits. Finland, meanwhile, has taken a relatively proactive stance, granting temporary protection to over 64,000 Ukrainians – one of the highest per capita rates in the region. Its strong intake reflects a more flexible and effective implementation of the directive, particularly from late 2022, when it surpassed Sweden and Denmark in number of arrivals.

In Sweden the so-called “massflyktsdirektivet“ grants Ukrainians temporary protection until at least March 2025. Its future beyond that, however, remains uncertain, adding to the challenges faced by refugees and policymakers alike. Sweden – considered liberal in migration policies (at least, up until 2016) – has been criticized for offering limited rights and financial support to displaced Ukrainians, making it one of the least attractive destinations among the Nordic countries (Hernes & Danielsen, 2024). Under “massflyktsdirektivet”, displaced Ukrainians were entitled to lower financial benefits and limited access to healthcare compared to refugees or residents with temporary permits. It was only in July 2023 that they became eligible for Swedish language training, and only in November 2024 could they apply for residence permits under Sweden’s regular migration laws – a pathway that can eventually lead to permanent residence.

Figure 1 illustrates significant fluctuations in the number of individuals granted collective temporary protection in the Nordic countries over the first two years following Russia’s full-scale invasion. As Hernes and Danielsen (2024) show in a recent report, all Nordic countries experienced a peak in arrivals in March-April 2022, followed by a decline in May-June. Sweden initially received the most, but aside from this early peak, inflows have remained relatively low despite its larger population (Table 1). Since August 2022, Finland and Norway have generally recorded higher arrivals than Denmark and Sweden. By August 2023, Norway’s share increased significantly, accounting for over 60 percent of total Nordic arrivals between September and November 2023.

Figure 1. Total number of individuals granted collective temporary protection in the Nordic countries

Source: Hernes & Danielsen, 2024, data from Eurostat.

Table 1. Total number of registered temporary protection permits and percent of population as of December 2023

Source: Hernes & Danielsen, 2024, data from Eurostat.

Comparison to Poland

Sweden’s policies and their outcomes compare rather poorly to those of Poland, one of the European countries that received the largest influx of Ukrainian migrants due to its geographic and cultural proximity. A key factor behind Poland’s relatively better performance is that pre-existing Ukrainian communities and linguistic similarities have facilitated a smoother integration. Ukrainians themselves played a crucial role in this regard, with many volunteering in Polish schools to support Ukrainian children. Sweden also had a community of Ukrainians who arrived to the country over time, partly fleeing the 2014 annexation of Donetsk and Crimea. Since these individuals were never eligible for refugee status or integration support, they had to rely on their own efforts to settle. In doing so, they built informal networks and accumulated valuable local knowledge. Nevertheless, after the full-scale invasion in 2022, they were not recognized as a resource for integrating newly arrived Ukrainian refugees – unlike in Poland.

However, Poland’s approach was shaped not only by these favorable preconditions but also by deliberate policy choices. As described in a recent brief (Myck, Król, & Oczkowska, 2025), a key factor was the immediate legal integration of displaced Ukrainians, granting them extensive residency rights and access to social services, along with a clearer pathway to permanent residence and eventual naturalization.

Barriers to Labor Market Integration

Despite a strong unanimous support for Ukraine across the political spectrum, there is less public debate and fewer policy processes in Sweden regarding displaced Ukrainians, most likely attributable to the general shift towards more restrictive immigration policies. The immigration policy debate in Sweden has increasingly emphasized a more “selective” migration, i.e. attracting migrants based on specific criteria, such as employability, skills, or economic self-sufficiency. This makes it puzzling that displaced Ukrainians, who largely meet these standards, have not been better accommodated. Before the full-scale invasion, Sweden was a particularly attractive destination among those who wanted to migrate permanently, especially for highly educated individuals and families (Elinder et al., 2023), indicating a positive self-selection process.

When large numbers of displaced Ukrainians arrived after the full-scale invasion, many had higher education and recent work experience, which distinguished them from previous refugee waves that Sweden had received from other countries. Despite a strong labor market in 2022, their integration was hindered by restrictions imposed under the Temporary Protection Directive, which limited access to social benefits and housing. At the same time, Sweden explicitly sought to reduce its attractiveness as a destination for migrants in general, contributing to a sharp decline in its popularity among Ukrainians after the war escalated.

In addition to the restrictiveness and numerous policy shifts over time, the temporary nature of the directive governing displaced Ukrainians – rather than the standard asylum process – creates significant policy uncertainty. This uncertainty makes it difficult for Ukrainians to decide whether to invest in Sweden-specific skills or prepare for a potential return to Ukraine, whether voluntary or forced, complicating their long-term planning. It also hinders labor market integration, increasing the risk of exploitation in the informal economy. Another key challenge is the unequal distribution of rights, as entitlements vary depending on registration timelines, further exacerbating the precarious situation many displaced Ukrainians face in Sweden.

A survey of 2,800 displaced Ukrainians conducted by the Ukrainian NGO in Sweden “Hej Ukraine!” in February 2025 provides key insights into their labor market integration (Hej Ukraine!, 2025). Survey results show that, currently, 40 percent of respondents are employed, with 42 percent of them holding permanent contracts while the rest work in temporary positions and 6 percent being engaged in formal studies. Employment is concentrated in low-skilled sectors, with 26 percent working in cleaning services, 14 percent in construction, and 12 percent in hospitality and restaurants. Other notable sectors include IT (11 percent), education (8 percent), warehousing (7 percent), elderly care (5 percent), forestry (3 percent), and healthcare (3 percent). The lack of stable permits, access to language courses (until September 2024), and financial incentives for hiring displaced persons have complicated their integration.

As mentioned above, the Swedish government has over time introduced several initiatives to facilitate the integration of displaced Ukrainians. However, assessing their effectiveness is crucial to identify persistent challenges and to formulate targeted policy solutions.

The Role of the Private Sector and Civil Society

The business sector, civil society and NGOs have also played a role in supporting displaced Ukrainians, filling gaps left by the public sector. This includes initiatives aimed at creating job opportunities that encourage voluntary return. However, broader systemic support, including simplified diploma recognition and targeted re-skilling programs, is needed to enhance labor market participation.

Moreover, there is a lack of information among displaced, potential employers and public institutions (municipality level) about the tools and programs available. For example, a community sponsorship program funded by UNHCR, which demonstrated positive effects on integration by offering mentorship and support networks, was only applied by five municipalities (UNHCR, 2025). Similar programs could be expanded to address structural barriers, particularly in the labor market. Another example is the Ukrainian Professional Support Center established to help displaced Ukrainians find jobs through building networks and matching job seekers with employers (UPSC, 2024). The center was funded by the European Social Fund, and staffed to 50 percent by Ukrainian nationals, either newcomers or previously established in Sweden, to facilitate communication. Experiences from this initiative, shared during a recent roundtable discussion –  Integration and Inclusion of Ukrainian Displaced People in Sweden, highlighted that between 2022 and 2024, about 1,400 Ukrainians participated in the project, but only one-third of participants found jobs, mostly in entry-level positions in care, hospitality, and construction.  Restrictions under the temporary protection directive, along with the absence of clear mechanisms for further integration, posed significant challenges; the lack of a personal ID, bank account, and access to housing were considered major obstacles. The uncertainty of their future in Sweden was also reported as a significant source of stress for participants.

Implications and Policy Recommendations

The lack of clarity surrounding the future of the EU Temporary Protection Directive, as well as its specific implementation in Sweden, leaves displaced Ukrainians in a precarious situation. Many do not know whether they will be allowed to stay or if they should prepare for a forced return. This uncertainty discourages long-term investment in skills, housing, and integration efforts.

Uncertainty also affects Swedish institutions, making it difficult to implement long-term policies that effectively integrate Ukrainians into society. To address these issues, the following policy recommendations are proposed.

  • Extend Temporary Protection Status Beyond 2025: Clear guidelines on the duration of protection are necessary to provide stability for displaced Ukrainians
  • Improve Labor Market Access: Introduce targeted programs for skill recognition, language training, and financial incentives for businesses hiring displaced Ukrainians
  • Enhance Civil Society and Private Sector Collaboration: Support mentorship and community sponsorship programs that facilitate integration
  • Acknowledge and Utilize displaced Ukrainians as a Resource: Recognizing displaced Ukrainians as potential assets in rebuilding Ukraine and strengthening European ties should be a priority.
  • Increase Public and Policy Debate: There is a need for greater discussion on how to integrate Ukrainians in Sweden, as an important complement to the policy priority of providing aid to Ukraine.

By implementing these measures, Sweden can provide displaced Ukrainians with greater stability, enabling them to engage in the formal labour market rather than being pushed into informal or precarious employment. This not only benefits Ukrainians by ensuring fair wages and legal protection, but also strengthens Sweden’s economy through increased tax revenues and a more sustainable labour force.

As Sweden continues to support Ukraine in its fight for sovereignty, it should also recognize the value of displaced Ukrainians within its borders, fostering their contribution to both Swedish society and Ukraine’s eventual reconstruction.

References

  • Hernes, V., & Danielsen, Å. Ø. (2024). Reception and integration policies for displaced persons from Ukraine in the Nordic countries – A comparative analysis. NIBR Policy Brief 2024:01. https://oda.oslom et.no/oda-xmlui/handle/11250/3125012
  • Hej Ukraine! (2025). Telegram channel. https://t.me/hejukrainechat
  • Elinder, M., Erixson, O., & Hammar, O. (2023). Where Would Ukrainian Refugees Go if They Could Go Anywhere? International Migration Review, 57(2), 587-602. https://doi.org/10.1177/01979183221131559
  • EUROSTAT. Decisions granting temporary protection by citizenship, age and sex – monthly data. Dataset. https://ec.europa.eu/eurostat/databrowser/view/migr_asytpfm__custom_15634298/default/map?lang=en
  • Myck, M., Król, A., & Oczkowska, M. (2025, February 21). Three years on – Ukrainians in Poland after Russia’s 2022 invasion. FREE Policy Brief. Centre for Economic Analysis (CenEA). https://freepolicybriefs.org/2025/02/21/ukrainians-in-poland/
  • Ukrainian Professional Support Center (UPSC). (2024). https://professionalcenter.se/omoss/
  • United Nations High Commissioner for Refugees (UNHCR). (2025). Community sponsorship. UNHCR Northern Europe. Retrieved [March 6, 2025] from https://www.unhcr.org/neu/list/our-work/community-sponsorship

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Energy Security at a Cost: The Ripple Effects of the Baltics’ Desynchronization from the BRELL Network

Posted on March 3, 2025 | Policy Brief

High-voltage power lines in a foggy landscape representing the desynchronization of the BRELL network.

The Baltic States’ desynchronization from the BRELL network on February 7, 2025, cut ties with Russia and Belarus, ending electricity trade. Though the transition was smooth with no outages, recent underwater cable disruptions have highlighted vulnerabilities, raising energy security concerns. These events underscore the importance of both diversifying and decentralizing power systems, drawing lessons from Ukraine’s electricity market, which has remained operational despite sustained Russian attacks.

The Baltics’ power system was part of a large Russian-operated synchronous electricity system known as BRELL, which connected the electricity transmission systems of Belarus, Russia, Estonia, Latvia, and Lithuania (Figure 1). The desynchronization from BRELL and the integration into the European grid have been discussed since 2007, when the Prime Ministers of the Baltic States declared desynchronization as the region’s strategic priority. In 2018, a decision was made to join the Continental European Synchronous Area through a connection with Poland, leading to significant investments – financially supported by the European Commission – to ensure adequate infrastructure. Fully committing to their priority, the Baltic’s desynchronized completely from BRELL on February 7th, 2025.

Figure 1. The BRELL power ring

Source: Karčiauskas (2023)

A Successful Physical (De)synchronization

The desynchronization process proceeded smoothly, with no blackouts. This success was anticipated, given the project’s meticulous planning over several years. A comparable example is Ukraine, which disconnected from the Russian and Belarusian power systems less than a month after Russia’s full-scale invasion in 2022. Ukraine then synchronized with the Continental European power grid ENTSO-E, an event that had been in preparation since 2017.

After the desynchronization, the Baltic states temporarily operated in island mode, relying entirely on domestic generation for all grid operations. To maintain system stability, the commercial capacity of interconnectors with the Nordics (whose regional group is not part of the Continental European Synchronous Area) was reduced, ensuring they could serve as reserves in case of major generator outages. The NordBalt cable is one such connector linking Sweden’s SE4 region and Lithuania.

However, conditions are gradually returning to normal. As of February 17, 2025, 700 MW is now available for commercial trading, as shown in Figure 2. Despite this progress, the commercial trading capacity of the interconnector with Poland (the LitPol line) remains heavily restricted and is primarily used to maintain system stability.

Figure 2. Day-ahead commercial transfer capacities on the Nordic interconnectors around the desynchronization

Source: Nord Pool

The Baltic region’s synchronization with the European grid is currently achieved through a 400 kV overhead power line connecting Lithuania and Poland. A second link, the Harmony Link, an underground cable, is planned to become operational by 2030. This makes the existing interconnection an essential part of regional infrastructure and a potential security risk, particularly given the recent sabotage of cables in the Baltic Sea. In response to these threats, Lithuania has increased surveillance of the NordBalt cable. The country’s prime minister has estimated the cost of securing the Baltic cables at €32-34 million,  seeking EU support for its funding. The government has also strengthened the protection measures. Initially, security was outsourced to a private security company, but plans are in place for the country’s Public Security Service (Viešojo saugumo tarnyba) to take over in spring 2025. Further, in preparation for the Baltics’ full desynchronization, the Polish Transmission System Operator deployed helicopters to patrol the interconnection, to enhance the security of the infrastructure.

From Trade Interruption to Infrastructure Sabotage

The most significant short-term impact of the desynchronization from the BRELL is the limitation of electricity trade for the Baltic states. The desynchronization has affected reserve balancing in the Baltic region, forcing the three states to rely more on their internal generation for system stability. This has resulted in reduced generation capacity for commercial trade, as the states must be prepared to again operate in island mode in case of an outage on the LitPol cable. Until February 19, 2025, the LitPol line remained unused for commercial trading. However, gradual increases are expected to eventually allow for 150 MW commercial trade between the Polish area and the Baltics, a significant reduction from the 500 MW previously available. This limited trading capacity could lead to higher prices in the Baltics, as the region is a net importer of electricity.

This is not the first time the Baltics have faced trade disruptions. In November 2020, after the construction of a Belarusian nuclear power plant near the Lithuanian border, Lithuania, followed by Latvia and Estonia, limited commercial electricity exchanges with Russia and Belarus. Furthermore, on May 15, 2022, electricity trade between Russia and Finland was halted, followed by the closure of the Kaliningrad-Lithuania connection the next day. While this event led to no blackouts, it clearly impacted the region’s price volatility (Lazarczyk & Le Coq, 2023).

Recently, the region has experienced sabotage to underwater interconnectors, significantly impacting electricity trade between the Nordics and the Baltics. On December 25, 2024, the Estlink 2 cable, one of two connections between Finland and Estonia, was cut, reducing transmission capacity between the two regions. Repair costs are expected to reach several million Euros. As disclosed via Nord Pool’s Urgent Market Message, repairs are expected to last until August 2025 – stressing the system. As Estlink 2 is offline, the Baltic system is not fully operating. If another major component fails, there may be insufficient capacity to maintain grid stability, increasing the risk of outages or the need for emergency interventions.

With the complete disconnection from the Russian and Belarusian power grids, Russia no longer has direct control over the Baltic electricity trade, effectively eliminating the risk of trade disruptions from Russia. However, a new energy threat has emerged: infrastructure sabotage. Although the perpetrators of recent sabotage incidents have not been clearly identified, both Lazarczyk & Le Coq (2023) and Fang et al. (2024) emphasize Russia’s strategic incentives to engage in such actions to maintain its geopolitical influence and discourage neighboring countries from reducing their energy dependence. Sabotaging critical infrastructure presents another efficient method of weaponizing electricity, particularly in the current context of limited Nord Pool imports and the Baltic States’ insufficient integration with the broader European grid.

From Diversification to Decentralization: Responses to Electricity Infrastructure Threats

The Baltic States have diversified their domestic energy supply sources to address the electricity infrastructure threat. In 2024, Estonia’s parliament approved the development of nuclear energy, with Fermi Energia planning to build two 300 MW light-water reactors. Other projects include a hydrogen-ready gas plant in Narva, which is expected to be completed by 2029, as well as an expansion of wind power capacity. While there was some support for extending the use of oil-fired plants in Estonia, their competitiveness has been undermined by high carbon prices and the closure of domestic oil fields. Elering, the Estonian Transmission system operator, has also begun long-term procurement to acquire 500 MW of new generation and storage for frequency management to ensure reserve capacity.

However, diversification alone will not be sufficient to address the challenges currently faced by the Baltic States. Incidents like the cutting of underwater cables underscore the growing need to decentralize the power system. Large, centralized power plants are more vulnerable to targeted attacks compared to decentralized energy systems. As a result, connected microgrids seem to be a viable solution for future energy resilience, as they can maintain functionality even when localized damage occurs. Again, Ukraine’s experience demonstrates the benefits of decentralization. Since the onset of the war, Ukraine has faced both physical and cyberattacks but has strengthened its energy resilience by decentralizing its system and expanding wind and solar power (Eurelectric, 2025). This approach has proven effective: while a single missile could destroy a nearly gigawatt-scale power plant, it would only damage an individual wind turbine or a small section of solar panels, significantly limiting the overall impact.

The desynchronization of the Baltic States from the BRELL network marked a complete break with Russia and Belarus, effectively ending any possibility of electricity trade between these countries and the Baltic region. This transition was successfully completed without any power outages. While the primary goal was to enhance energy security in the Baltics, several challenges remain, as highlighted in this policy brief. Recent disruptions to underwater cables, as well as Russia’s attacks on Ukraine’s electricity market, underscore the urgent need for both diversification and decentralization to strengthen the region’s energy security. While energy supply diversification reduces supply chain dependencies, decentralization enhances resilience against targeted attacks, creating a more robust and flexible energy system.

References

  • Eurelectric, 2025, Redefining Energy Security In the age of electricity, Lexicon.
  • Fang, S., Jaffe, A. M., Loch-Temzelides, T., and C.L. Prete. (2024). Electricity grids and geopolitics: A game-theoretic analysis of the synchronization of the Baltic States’ electricity networks with Continental Europe. Energy Policy, 188, 114068.
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Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Three Years On – Ukrainians in Poland after Russia’s 2022 Invasion

Posted on February 21, 2025 | Policy Papers

Ukrainians in Poland rallying in Kraków, waving Ukrainian and Polish flags.

The wave of Ukrainian refugees that followed the full-scale Russian invasion on February 24th, 2022, was met in Poland with unprecedented levels of support and solidarity. According to data from the Polish Household Budget Survey, 70 percent of households offered some help to Ukrainians in Poland, and over 10 percent (1.3 million households) provided direct personal assistance. Overall, by early 2025, 1.9 million refugees had registered in the dedicated social security registry (PESEL-UKR system), and 1 million continue to be registered as residing in Poland. Drawing on other data sources, we argue in this policy paper that the latter figure is highly overstated, giving rise to unjustified criticisms of low school enrolment among Ukrainian children and low rates of labour market activity among adult refugees. We highlight the risks that these critical voices may become prominent in the ongoing campaign ahead of the Polish presidential elections. During the crucial months of prospective peace negotiations, when presidential candidates are appealing for voters’ support, we argue that the public debate in Poland concerning Ukraine and Ukrainian refugees ought to be grounded in reliable evidence.

Polish Support for Ukraine: Shifts in Public Attitudes, and Policy Challenges Amid War and Elections

The dramatic events of late February 2022 shook the populations across Ukraine, Europe and the world. The objective of the massive, full-scale Russian aggression was clear – to rapidly take over Kyiv, force Ukraine to surrender and take over full control of the country thus subjugating it into Kremlin’s rule. Three years later, while thousands of Ukrainian soldiers and civilians have lost their lives, and while Russia has imposed a massive economic and social burden on Ukraine, its key objective has badly failed and remains far from being realised. This thanks to the commitment of the Ukrainian government, the country’s army and the mobilisation of the Ukrainian population. In turn, the country’s resistance would not have been possible without substantial support from the outside, primarily from countries in the European Union and the U.S. International aid from governments to Ukraine between February 2022 and October 2024 amounted to over €230 billion (bn) with the largest part contributed by the US (€88 bn), the European Commission and European Council (€45 bn) and Germany (€16 bn). Proportional to 2021 GDP levels, the highest support came from Estonia (2.20 percent), Denmark (2.02 percent) and Lithuania (1.68 percent) (Kiel Institute, 2024). Support for Ukraine has come in many forms – military, material, financial, political and diplomatic. The international community has also imposed substantial economic and political sanctions against Russia, and has excluded it from many international forums, marginalising its voice in international discussions and meetings.

On top of that, Ukraine’s neighbours and many Western countries opened their borders and welcomed a massive wave of refugees escaping the immediate military invasion in the east and north of Ukraine, seeking safety from continued bomb and drone attacks on the entire country, and running away from the risk of a complete Russian take-over. It is estimated that up to 8 million Ukrainians left the country in the first months after the full-scale war started, initially moving mainly to Poland, Romania and Slovakia (Polish Economic Institute, 2022; UNCHR, 2022). At the same time the Russian aggression resulted in internal displacement of more than 3.6 million Ukrainians (IOM UN Migration, 2024). While many of the international and internal refugees have since returned, over 6.8 million Ukrainians still reside outside of Ukraine’s borders (UNCHR, 2025).

The wake of the war was met with an unprecedented wave of support among the Polish population (Duszczyk and Kaczmarczyk, 2022). We use data from one of the largest representative Polish surveys – the Household Budget Survey 2022 and 2023 – to show the degree of involvement among Polish households in direct and indirect support to Ukrainian refugees. We also show that declarative general sympathy towards Ukrainians reached over 50 percent in 2023 –  twice as high compared to 16 years earlier. This support has by now fallen close to the levels from just before the full-scale war (40 percent). As the immediate need for help has become less urgent, and the refugees have organised their lives in Poland, the involvement of Polish households in supporting the Ukrainian population has also declined. At its peak at the beginning of the war the proportion of Polish households that were actively involved in helping the Ukrainian population reached nearly 70 percent, with over 10 percent (i.e. more than 1.3 million) of the households providing direct assistance to the refugees.

In this policy paper we call into question some of the official data on the number of Ukrainian refugees who continue to reside in Poland (almost 1 million) (EUROSTAT, 2025). We argue that inconsistency across different sources with regard to precise numbers – such as likely inflated refugee count in the official social security register – may be used  to build unfavourable claims against the refugees and the Ukrainian cause overall, as arguments and narratives develop based on marginal anecdotal evidence and incorrect statistics. As the new U.S. administration tries – in its own way – to bring an end to the war, Ukraine will need continued strong support from all Western allies to end the war on favourable terms for Ukraine and to get significant additional help to rebuild the country. Ukraine’s safety and economic security will depend on Western military guarantees and closer integration with the EU. All of this requires the support of populations in these countries, which gets increasingly undermined by internal disputes and external political interferences.

As negotiations to end the war begin to take shape, Poland enters a crucial electoral campaign ahead of its May 2025 presidential elections. This combination is likely to place the Ukrainian question among the top issues on the local agenda. At the same time, there is a risk  that the extent of support towards Ukraine and Ukrainian residents in Poland will be used in the battle for electoral votes. We argue that any debate around this topic should draw on reliable, up to date data sources. In this regard, the  government should provide more information to clarify data inconsistencies, to shed more light on the situation among Ukrainian citizens currently residing in Poland, and to ensure that any doubtful narratives raised in the public debate are quickly addressed.

Ukrainian sovereignty, its peaceful development and prosperity are very much in the interest of both Poland and the rest of Europe. Therefore, the Polish government must provide arguments to reinvigorate the support for Ukraine among its population. This will be fundamental to ensure Ukraine’s military success and stability, to guarantee the mutual benefits of integration of the Ukrainian population in Poland, and for the future economic cooperation with Ukraine in the prospective enlarged European Union.

The Outbreak of the Full-Scale War: Ukrainians in Poland

In the first couple of months after the full-scale Russian invasion of Ukraine on February 24th  2022, over 2 million refugees fled to Poland through the common land border, with as many as 1.3 million people crossing the border during the first two weeks of the war (Figure 1a). The exact number of refugees who arrived in Poland is difficult to gauge as some people left Ukraine via the border with Romania or Slovakia and could have entered Poland across the uncontrolled borders of the Schengen area.

BOX 1. Ukrainian citizens in Poland before the war in 2022

Before February 24, 2022, the migration of Ukrainian citizens to Poland was regulated by existing legal mechanisms concerning all foreigners coming from non-EU countries (European Parliament, 2010). Migrants could apply for a temporary residence permit for a maximum of three years, most often in connection with prearranged employment or education (Sejm RP, 2013). Since 2017 Ukrainian citizens with biometric passports could travel to Poland and other EU countries without a visa, but their stay was limited to 90 days (European Parliament, 2017). Access to the Polish social transfer system for migrants and their families was strictly regulated and limited. Labor migrants and temporary visitors under the visa-free regime had no right to public benefits or healthcare (Sejm RP, 2003).

At the time, application for refugee status was possible, but required undergoing a lengthy and burdensome asylum procedure. Those with refugee status granted had access to public transfers and healthcare (Sejm RP, 2003).

In accordance with the European regulations of Council Directive 2001/55/EC of 20 July 2001, the Polish government responded to the refugee crisis by establishing a special residence status for those fleeing the war. The regulations were introduced as early as  March 12, 2022, and as a result, all Ukrainian refugees who arrived in Poland since 24 February could register themselves (and their family members) in a special social security registry, the so-called PESEL-UKR (Sejm RP, 2022). This registration immediately provided the refugees with an official status of temporary protection and legalized their stay in Poland until a specified date, which – as the war continued – has been regularly extended. In comparison to other, non-EU migrants, the PESEL-UKR status grants the refugees simplified access to the Polish labour market and gives them access to public healthcare and social transfers – including general support available to all legal residents, as well as special financial and non-monetary aid targeted specifically at refugees (Duszczyk and Kaczmarczyk, 2022). The registration process was streamlined and widely accessible in all municipality offices throughout Poland and resulted in rapid registration of the majority that had arrived to Poland since February 24, 2022. By the end of June 2022, 1.2 million individuals had registered for the PESEL-UKR status. The number grew to 1.4 million by October 2022 and continued to grow to 1.9 million registrations by January 2025. As evident from Figure 1b not all of those who crossed the Polish border (or arrived in Poland having left Ukraine through a different country) stayed in the country. Some continued their journey to other EU countries and beyond, while some decided to return to Ukraine. It is worth noting though that of all the registrations carried out by the end of 2024, nearly half happened in the first 8 weeks following the invasion.

Figure 1. Number of Ukrainian citizens crossing the border between Poland and Ukraine and registering for PESEL-UKR, 2021-2024

Note: Weekly data on crossings via all land borders with Ukraine.
Source: Open Data Portal (2025a, 2025b).

A notable and important legal change was introduced in October 2022, whereby individuals are automatically withdrawn from the PESEL-UKR registry after a period of 30 days when they (1) leave Poland, (2) apply for a residence permit, or (3) apply for international protection status (Sejm RP, 2022). This change is the reason for the substantial drop in the number of registered refugees at the end of 2022, with over 400 000 individual withdrawals (Figure 1b). This change in legislation was aimed at estimating more precisely the number of Ukrainian refugees currently residing in Poland. However, since withdrawals from the system require that departures from the territory of Poland are officially recorded at the border, or follow a parallel registration in another EU country, or are recorded as departures from the Schengen area through another country, the numbers in the system may still be far from the actual number of refugees currently residing in Poland.

Since late 2022 the number of registered Ukrainian refugees in Poland has been fairly stable at slightly below 1 million. Similarly, the shares of different age cohorts have not changed. In Figure 2 we show the split of those in the PESEL-UKR registry by age. Children under the age of 18 account for about 40 percent of all refugees, of which 30 percent are in schooling age (7-17). 7 percent of the refugees are aged 62 years or older. Among those aged 18-61 years old, 70 percent are women. It is worth noting that out of about half a million children recorded in the first 7 months, almost 400 000 are still registered in the PESEL-UKR registry, a number that has been stable since the end of 2022. As we show below, these values are significantly higher compared to the number of refugee children reported by two other administrative sources. This in turn casts doubt on the reliability of the estimates of the total number of Ukrainian refugees in Poland.

Figure 2. Ukrainian citizens registered with PESEL-UKR, by age group

Note: Based on registered year of birth, age as of 2025.
Source: Open Data Portal (2025b).

Where Are All the Registered Children?

To check the reliability of the PESEL-UKR registry data, we match the information from the registry with information from school registers provided by the Ministry of National Education, and the number of children benefitting from social transfers provided by the Social Insurance Institution (ZUS). As evident in Figure 3, the number of registered school-age children in the PESEL-UKR registry and the number of those who are officially registered in Polish schools significantly differ, and the difference seems stable over time. According to school records, most of the Ukrainian parents promptly enrolled their children in schools right after their arrival in Poland – about 120 000 pupils joined Polish schools as early as March 2022. The numbers grew in September 2024, which followed the introduction of obligatory schooling for all Ukrainian children aged between 7 and 17  (Sejm RP, 2024), with online classes in Ukraine permitted only for those in their final year. When we compare data for late 2024 and early 2025, we see that while about 270 000 children aged 7-17 were registered in the PESEL-UKR database, only 152 000 attended Polish schools – resulting in a very low enrolment rate of about 56 percent – raising legitimate concerns over the children’s academic and social development (see for example CEO, 2024).

Figure 3. Number of school-age children among Ukrainian refugees

Note: School registrations: all school types except preschool education, post-secondary schools, schools for adults and grades in which children are at least 18 years old. Ukrainian refugees only. Child benefit data points as reported in June, October and December.
Source: Open Data Portal (2025b, 2025c); information on 800+ benefit recipients: unpublished data from the Social Insurance Institution (ZUS).

As evident from Figure 3 though, from late 2023 all the way until early 2025, the ‘800+ benefit’ (which is a universal child benefit paid to all children aged 0-17) was paid to around 150 000 Ukrainian refugee children aged 7-17. Given the ease of claiming the benefit, and the relatively high value of the transfers (about 23 percent of net minimum wage per child per month), it seems very unlikely that so many families would opt out of the support. Looking at the close match between the numbers from ZUS and from the Ministry of Education, the more likely interpretation of the figures is not that children stay away from school and fail to claim social transfers, but rather that far fewer children continue to reside in Poland.

An additional argument supporting the inaccuracy of the PESEL-UKR data comes from a report published by the Narodowy Bank Polski (the Polish Central Bank) (NBP, 2024). Using information from a large survey conducted among Ukrainians living in Poland the report shows that 83 percent of school-age children in refugee families were enrolled in either a Polish or a Ukrainian school physically based in Poland. This is very far from the 56 percent rate calculated with reference to administrative data, again suggesting that the PESEL-UKR numbers of school-age children are highly inflated. If that is the case, not only the number of refugee children but the overall PESEL-UKR numbers (992 000 by January 2025) should be called into question.

How Many of the Registered Adults Are Active on the Labor Market?

The accuracy of the overall number of refugees is important because it is one of the key references for policy discussions. While international regulations specify that victims of war and conflict are granted the same basic rights and privileges as other legal residents, including access to the labour market, healthcare and other public services (Duszczyk et al., 2023), negative sentiments towards Ukrainian citizens have recently grown in Poland. Further, various restrictions on access to public support for Ukrainian refugees have already been publicly discussed and proposed in Parliament. These sentiments feed on the claims of fraudulent behaviour, unwillingness to engage in official employment and crowding out of public services for Polish nationals. Such claims about Ukrainians are spread more easily if not met by accurate numbers.

Figure 4. Number of Ukrainian men and women contributing to pension insurance in Poland

Note: ‘Other countries’ refers to other registered foreigners.
Source: Social Insurance Institution ZUS (2024).

Looking at labour market activity, the number of Ukrainians who were officially active on the Polish labour market (as employees, self-employed or receiving unemployment benefit) and who thus paid pension contributions to social security in December 2023 stood at 759 000 (see Figure 4). Of those 396 000 were men and 363 000 were women. While ZUS, the Social Insurance Institution, does not distinguish between migrants (those with the right to stay before February 24th, 2022) and refugees (with PESEL-UKR status) it seems safe to assume that those who registered in the ZUS database in 2022 and 2023 belong to the latter group. The difference between the number of Ukrainians contributing to social security in December 2021 and December 2023 is 132 000 and, as seen in Figure 4, the additional numbers of those registered differ only for Ukrainian women. New Ukrainian male refugees certainly also appear in the database in 2022 and 2023, but their number is difficult to estimate as some earlier migrants returned to Ukraine after the outbreak of the war, and as a result the net effect of men between 2021 and 2023 is essentially zero. Focusing on women, we can compare the number of new registrations in the ZUS database to the total number of women aged 18-59 (excluding students) in the PESEL-UKR database (about 335 000 in December 2023). Such a ratio would suggest that only about 40 percent of female Ukrainian refugees are formally contracted on the Polish labour market (on contracts paying social security contributions). This is much lower than the values presented in the NBP report (2024), suggesting that in July 2024, around 70 percent of the adult war refugees were working and further 19 percent were looking for a job. This comparison once again suggests that the PESEL-UKR numbers are significantly inflated.

Addressing the public concerns with regard to school enrolment and labour market activity with correct figures could help counter the growing negative sentiments towards Ukrainians in Poland as well as towards the overall support for the process of securing peace in Ukraine and integrating it closer with Poland and the EU. In the next section we show that when the full-scale war started in February 2022, not only the sentiments were strongly in favour of supporting Ukraine. Additionally, the level of engagement of the Polish population in actively assisting Ukrainian refugees was truly unprecedented.

Individual Support in Response to the Outbreak of the War

In the first few weeks after the full-scale Russian invasion the Polish society almost uniformly united in providing help and assistance to Ukrainians affected by the war. The Polish Economic Institute estimated that during the first 3 months the financial, humanitarian and material help provided by the Polish society alone reached 9-10 billion PLN, which corresponded to 0.34-0.38 percent of Poland’s GDP (Baszczak et al. 2022). Polish private businesses were also quick to join the assistance efforts, donating money, food, medical and other specialized equipment, and providing services such as transportation, insurance, and education free of charge (WEI 2023). Until May 2022, 53 percent of Polish enterprises engaged in different kinds of relief or support.

The assistance to refugees has been documented in numerous anecdotes, formal reports and extensive media coverage. The scale of support is also reflected in the Polish Household Budget Survey, a regular household survey conducted by the Central Statistical Office. Already in the first quarter of 2022 the survey included several questions related to the assistance given by the interviewed households to Ukrainian refugees. These questions were then included in the survey throughout 2022 and 2023. As shown in Figure 5, when the inflow of refugees from Ukraine started in late February 2022, nearly 70 percent of Polish households offered some form of assistance. Most of this help took the form of gifts and money transfers, but 10.4 percent, i.e. over 1.3 million Polish households, offered direct help such as transport, providing an overnight stay, delivering goods to accommodation venues, etc. The fraction of those offering assistance stayed very high through the first half of 2022, and 23 percent of Polish households still provided some form of assistance in the last quarter of 2022 (Figure 5). As the war stalled, and the Ukrainian population settled and became more independent, and the Polish government took official responsibility of assisting those still in need, the level of direct support from households fell. However, in late 2023 9 percent of Polish households still continued to provide some form of assistance. What is really special about the initial wave of support is that the positive attitudes towards the refugees and the Ukrainian cause were nearly universal. As seen in Figure 6, assistance was offered by high and low educated households (79 and 59 percent), those living in large cities and in rural areas (73 and 68 percent), the young and the old (66 and 63 percent). Households who declared good material conditions were more likely to offer help (75 percent), but even among those who declared difficulties with their financial status 41 percent came forward to offer some assistance.

Figure 5. Polish households engaged in assisting Ukrainian refugees, 2022-2023 (by quarter)

Note: Help covers support and transfers to individuals and institutions in Ukraine as well as to Ukrainian refugees in Poland. “Personal assistance” – direct help to refugees (with job search, doctor’s visits, public matters, language lessons, translation, etc.), “Other help” – help at the border, in reception points, temporary accommodation points, gift collection points, transportation, hosting or subletting own housing free of charge, blood donation.
Source: own compilation based on the Polish Household Budget Surveys 2022-2023.

Figure 6. Polish households engaged in assisting Ukrainian refugees (any help) in the first quarter of 2022, by household characteristics

Notes: Urban status – A: rural area, B: city below 100 000 inhabitants, C: city over 100 000 inhabitants. Material situation (self-assessed) – D: bad or rather bad material situation, E: average material situation, F: good or rather good material situation. Age of head of household – G: 18-29, H: 30-59, I: 60 and older. Education of head of household – J: lower than secondary, K: secondary or postsecondary, L: tertiary. Source: own compilation based on the Polish Household Budget Survey 2022.

It is worth noting also that by the time the full-scale war broke out in February 2022 the sentiments among the Polish population towards Ukrainians had improved compared to attitudes in the 1990s and early 2000s. These sentiments have been regularly surveyed by the Public Opinion Research Center CBOS, and we summarize them in Figure 7. As evident, in the early 1990s the proportion of Poles declaring positive sentiments towards Ukrainians was very low. It steadily increased until  about 2017 and then grew rapidly from 2018 till 2020. In 2022 the sentiments towards Ukrainians reached their peak, with over 50 percent of Poles declaring fondness towards them – on par with nations such as Lithuania and Slovakia. At the same time positive attitudes towards Russians reached an all-time low of 6 percent. Positive sentiments towards Ukrainians declined in 2024 – the last year for which the data is available – but even after the drop they are still high when compared with attitudes before 2023.

While the general positive sentiments towards Ukrainians in Poland has improved over the years, 2022 was truly unique when it comes to attitudes toward Ukrainian refugees (see Figure 8). Between 2015 and 2018, i.e. after Russia’s annexation of Crimea in 2014, around 50-60 percent of Poles declared that refugees from the conflict areas in Ukraine should be welcomed in Poland. When the same question was asked again in March 2022, 95 percent agreed that Ukrainian refugees should be welcomed in Poland and nearly 60 percent declared that they ‘definitely’ agreed with such a policy. However, the proportion of Poles in support of welcoming Ukrainian refugees has decreased. In late 2024 the share was more or less back at the level prior to the full-scale war, i.e. at over 50 percent.

Figure 7. Share of survey participants declaring fondness towards foreigners of different origin

Source: The Public Opinion Research Center CBOS (2024a).

Figure 8. Opinion survey: If Poland should accept Ukrainian refugees coming from the conflict territories

Note: The surveys were discontinued between 2018 and 2022.
Source: Public Opinion Research Center CBOS (2024b).

Why Have Sentiments Shifted?

At the crucial time of a possible long-awaited end to the Russian invasion, when coordinated support of Western governments will be essential to secure a just and long-lasting solution, the willingness of these governments to firmly stand behind Ukraine will, to a large extent, depend on the sentiments among their voters. Thus, the wavering enthusiasm for the Ukrainian cause in countries such as Poland can be seen as a worrying sign, in particular given how high the level of support was in the early days of the invasion. This support will be particularly important over the next few months, given the likely period of intensive international negotiations and the battle for votes in the upcoming Polish presidential elections.

It is not unusual to try to put the blame for various unfortunate developments on external forces, including global trends, external conflicts and all things ‘foreign’. Thus, the fact that many people in various countries, including Poland, blame their perceived worsened economic conditions on the consequences of the war and the related influx of Ukrainian refugees is far from surprising. While some politicians might want to explain the complex broad context, others will take advantage of these sentiments and continue to fuel the negative discourse. With that in mind, three main topics have been particularly visible in the public debate in Poland:

  • access to social transfers, in particular to the ‘800+’ child benefit for Ukrainian refugees
  • Ukrainian refugees’ participation in the Polish labour market and tax contributions to the local budget
  • risks to particular groups of interest, most prominently reflected in Poland by the crisis surrounding imported Ukrainian grain (see Box 2)

The first two issues are strongly related to the general approach to immigration and integration of migrants in the Polish society. The popular media discourse – in traditional and social media – tends to focus on instances of abuse of social support and public services, and to build up negative sentiments along the lines of supposed unwillingness to engage in legal economic activity among those who have settled in Poland. While one can certainly identify anecdotes which selectively confirm all sorts of misbehaviour, the overall evidence would clearly reject such claims. As discussed, the surveys conducted by the NBP show that a significant majority of migrants and refugees from Ukraine find legal employment in Poland. Further research based on administrative data demonstrates that many Ukrainians establish and successfully run their businesses in Poland (Polish Economic Institute, 2024). Between January 2022 and June 2024 Ukrainian migrants and refugees established almost 60 000 enterprises in Poland, and as Vézina et al. (2025) argue, these firms did not crowd out Polish businesses, meaning they represent a true value added to the national and local economies.

Recent public discussions, however, have focused on the combination of employment and benefit claims. The debate started with two parliamentary initiatives by the right wing Konfederacja and Prawo i Sprawiedliwość opposition parties and was then picked up by the leading government party’s presidential candidate, Rafał Trzaskowski (money.pl, 2025). The proposed legislative changes are broadly similar, suggesting that access to the main child benefits – the ‘800+ benefit’ – should be limited to those refugee families where at least one of the parents is formally employed. Such conditionality does not apply to Polish families, and according to current legislation, to no other families legally residing in Poland (Konfederacja, 2025; Prawo i Sprawiedliwość, 2025). The supposed aim of the changes would be to, first of all, limit fraudulent claims among those who no longer reside in Poland, and secondly, to restrict access to the benefits to those who contribute with their taxes to the public budget only. On both counts the policy seems badly misconceived. As shown above, the ‘800+’ claims closely match the numbers of children officially registered in Polish schools, far below the numbers registered in the PESEL-UKR database. Moreover, such a policy is unlikely to lead to much higher employment among refugee parents. The benefit is universal and received by all families regardless of employment status or income; previous research has shown a similar benefit to have negligible effects on employment (see for example: Myck and Trzcinski, 2019). Therefore, the most likely reason for some refugee parents to not take up work is not unwillingness, but rather other constraints – constraints which will not change as a result of the proposed restrictions. Most Ukrainian families who fled the war are mothers whose partners could not join them due to military restrictions on the mobility of Ukrainian men. While many women settled and found jobs, family obligations may significantly limit some refugee’s options for regular employment. For these families, withdrawing the eligibility for the ‘800+ benefit’ would be a significant loss of income with potentially dire consequences for their children. It is thus difficult to understand the initiatives as anything other than attempts to address the growing critical sentiments towards the refugees to gain support among voters who are convinced by the anecdotal narrative. As argued above – with the exception of anecdotes – there is very little evidence in support of such legislative changes. Even from the point of view of potential budgetary gains, the proposed limitations on benefit claims would impose heavy administrative costs which would likely exceed any resulting savings. The politicians coming forward with such proposals would be well advised to consider data from various sources and avoid raising issues which have a clear potential to fuel negative sentiments towards refugees and migrants.

BOX 2. The dispute over the Ukrainian grain

In February 2022, Russia’s full-scale invasion destabilized the Ukrainian market, in particular the agricultural sector, due to blocked exports through the Black Sea. To enable exports, so-called Solidarity Lanes were established, including corridors crossing Poland (European Commission 2022). However, Poland was not prepared to handle and re-export large volumes of Ukrainian agricultural products, due to insufficient capacity of Polish sea ports (farmer.pl, 2023; for such quantities experts argue that road transport is unprofitable; Kupczak, 2023). This led to a surplus of grain in multiple storehouses throughout the country, especially in Southeastern Poland. Overall, Polish grain stocks increased by over 250 percent, from 3.8 to almost 10 million tones (Supreme Audit Office, 2023).

The drastic surplus of grain, together with much lower prices for Ukrainian crops, led to a dramatic price drop—one could buy mixed Polish-Ukrainian grain for half the price it cost the previous year (rp.pl, 2023). Apart from its impact on quantity and price, Ukrainian grain drew public attention also due to concerns regarding its quality (money.pl, 2023). Imported agricultural and food articles must undergo rigorous quality controls at the border, depending on their purpose – human consumption, animal fodder or cultivation, conducted by the respective state inspection office. Random controls held in 2022 by the Food Articles Inspection revealed that 2.4 percent of the grain samples were banned from entering the market (rp.pl, 2023).

According to a report by the Supreme Audit Office (2023), controls run by the Veterinarian Inspection were drastically limited as of May 2022 which allowed poor quality fodder grain to enter the Polish market (Supreme Audit Office 2023). Since technical grain – used in the production of biofuels, insulating materials or oils – is exempt from border quality controls, its imports and sale as consumable grain could be particularly profitable. Several incidents of such forgery were subject to investigation confirming that large quantities of technical grain originating from Ukraine were sold as consumable to Polish companies (gov.pl, 2024).

The tightened border controls that followed, resulted in multiday delays in the transportation of food products from Ukraine. To mitigate these constraints an agreement was reached, and, as of March 8, 2023, grain transit through Poland to other final destinations (within EU or to a third country via Polish ports) is exempt from border controls at the Polish-Ukrainian border and sealed by the National Revenue Administration. These seals can be removed only at the final destination (gov.pl, 2023a).

Throughout this period Polish farmers held demonstrations opposing the influx of Ukrainian grain. The border crossings with Ukraine were temporarily blocked by protests aimed at disrupting the flow of goods. The symbolic dumping of Ukrainian grain on the ground at the Medyka border crossing resulted in a famously cited statement by the Ukrainian President Volodymyr Zelensky that this event may be seen as evidence of the “erosion of solidarity” with Ukraine (BBC, 2024).

After the EU-level temporary embargo on four types of grains and oil seeds from Ukraine was lifted in mid-September 2023 (which was in effect since May 2023), Ukraine agreed to introduce export measures to avoid grain surges (European Commission, 2023). Nevertheless, Poland administered a unilateral ban on selected products and their derivatives (gov.pl, 2023b), which led Ukraine to file a complaint with the World Trade Organization (WTO, 2023). While the ban still applies (gov.pl, 2025), the Polish government has on multiple occasions actively sought to convince the EU to include wheat (and other grains) among the crops covered by the quotas under the EU-level 2022 regulation on temporary trade liberalization with Ukraine (the Autonomous Trade Measures Regulation; OKOpress, 2024; European Commission, 2024).

Conclusions

Considering the current approach by the U.S. administration under President Donald Trump, Ukraine’s position in the prospective negotiations will strongly depend on the support it can gather from its European allies. This in turn is likely to reflect the sentiments towards the Ukrainian cause among European voters. In Poland, where critically important presidential elections are scheduled for May 2025, the importance of these sentiments might be particularly salient. On the one hand, the candidates are likely to voice support for Ukraine to secure peace and stability in the region. On the other hand, they may appeal for support among voters who are critical of the generous approach of Polish public institutions towards Ukrainian refugees.

As shown in this policy paper, the critical voices highlighting instances of abuse of privileges granted to refugees are largely unfounded, and much of the critical discourse is linked to – in our view – highly inaccurate numbers of officially registered refugees with the PESEL-UKR status system. The government would do a service to the quality of the debate about Ukrainian refugees in Poland, and at the same time defuse some of the critical claims, by verifying the PESEL-UKR database.

Using administrative data on school enrolment and benefit claims we show that these match almost perfectly, with around 150 000 children aged 7-17 in both registries in late 2024. This is far less than the 270 000 children in this age group registered in the PESEL-UKR database and assumed to be residing in Poland. Similarly, survey data suggests that about 70 percent of Ukrainian refugees are active on the Polish labour market. This proportion is much lower when official data based on social security contributions is compared to the total number of adult refugees in the PESEL-UKR registry. The comparison once again suggests that the figures in the latter database are significantly overstated. It is thus very unlikely that the number of Ukrainian refugees in Poland is as high as the numbers officially reported in the registry (992 000 in January 2025).

The accuracy of the numbers is important for several reasons, and the ability to address various critical claims in the public debate is only one of them. At the time of an electoral campaign ahead of a highly significant presidential election, this reason, however, may prove fundamental to avoid further polarization of the debate about continued support for Ukrainian refugees in Poland. It is also crucial for securing strong support for Ukraine by the Polish government in the coming challenging months of peace negotiations. While it is likely impossible to restore the level of positive attitudes toward Ukrainian citizens seen in Poland in February and March 2022, that degree of solidarity should serve as a foundation for a deepened relationship between the two countries.

Acknowledgement

The authors acknowledge the support from the Swedish International Development Cooperation Agency, Sida. We are grateful to Patryk Markowski for helpful research assistance. The Polish Household Budget Survey data (2022, 2023) used in the analysis was provided by Statistics Poland (Główny Urząd Statystyczny). We are grateful to the Social Insurance Institution ZUS (Zakład Ubezpieczeń Społecznych) for providing us with unpublished data on child benefit recipients.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

“Active Parent”: Addressing Labor Market Disadvantages of Mothers in Poland

Posted on November 12, 2024 | Policy Brief

A working mother in Poland multitasking with her child, representing Active Parent Poland.

In 2023 only one out of four children aged 0-3 years was covered by the Polish system of formal childcare. Traditional social norms with regard to provision of childcare at home, together with high costs of existing formal and informal childcare arrangements constitute important constraints with regard to labor market participation among mothers with the youngest children. While labor market activity rate among women aged 25-49 years stands at 84 percent overall, it is more than 20 percentage points lower for mothers with children aged 1-3 years. In this policy brief we provide an overview and an evaluation of “Active parent”, a recently introduced policy aimed at supporting earlier return to work after birth among mothers in Poland. We argue that the success of the program will be strongly determined by the extent to which it manages to stimulate growth of high-quality formal childcare for those aged 0-3 in the next few years.

Gender Gaps in Employment and Childcare in Poland

The average labor market activity rate among women aged 25-49 in Poland stands at 84 percent, which is slightly above the EU average (by 2 p.p.; see Figure 1). The rate, however, differs substantially by age group, and even more by the number and age of children. For childless women just below 30 years, the activity rate almost exactly matches the rate for men (88 percent vs 90 percent). However, among women with children, and especially among those with the youngest child being between 1 and 3 years old, this number drops to 62 percent. For fathers with such children, the activity rate however stands at 98 percent. Women gradually return to work when the youngest child is growing up – 3 out of 4 of those with a child aged 4 to 6 years are active in the labor market, and this share grows to 84 percent for mothers of teenagers (aged 13-14 years). At the same time women in Poland are much less likely to work part-time than women in the EU on average (7 vs. 28 percent, respectively; Eurostat, 2021). Rates of part-time employment are higher if women have more and younger children, though not by much (11 percent for mothers of 3+ children, 10 percent when a child is up to 3 years old; PEI, 2022).

While in most Polish households with children both parents are working for pay, traditional gender norms still largely prevail with respect to providing childcare or handling household duties. According to a survey conducted by the Polish Economic Institute (PEI), in only 18 percent of double-earner families do both parents take care of a child to the same extent (Polish Economic Institute 2022). For 68 percent of such families, it is the mother who provides most care. In only 1 in 10 families the father is the main care provider.

Figure 1. Labor market activity rates in Poland in 2022

Source: Authors’ compilation based on: PEI, 2022; Eurostat.

Traditional attitudes towards childcare responsibility are clearly visible in the actual gender split of parental leave in Poland. Despite the introduction of a non-transferable 9-week long parental leave dedicated to fathers (out of the total of 41 weeks of parental leave) on top of a two-week paternity leave, the division of care duties for the youngest children has essentially remained unaffected. While 377 000 mothers claimed parental leave benefits in 2021, only 4 000 fathers decided to stay at home with their child (Social Insurance Institute, 2021). Besides, many fathers still do not exercise their right to the fortnight of the paternity leave. According to the PEI survey conducted among parents of children aged 1-9 years, 41 percent of fathers reported virtually no work gap after the birth of their child and further 43 percent acknowledged only a short break from work (up to 14 days). On the other hand, 85 percent of mothers took a work break after childbirth of more than 8 months. For 40 percent it lasted between 12-18 months and for 28 percent the separation from work exceeded one and a half years.

Evaluating the Consequences of the “Active Parent” Program

To address the resulting disadvantages for mothers on the labor market the current Polish government introduced a program called “Active parent” in October 2024. The program is targeted at parents of children aged 12 to 35 months and consists of 3 options. The highest benefits in the program amounting to 350 EUR per month, are granted within the “Active at work” option to households in which parents are active on the labor market. For couples, the minimum work requirement is half-time work for each parent, while lone parents are required to work full-time. The same monthly amount can be granted if the child is enrolled in institutionalized childcare (“Active in nursery” option), though in this case the benefit does not exceed the cost of the nursery. This option covers both formal public or private nursery as well as semi-formal care provided in “kids clubs”. Finally, in case the child stays at home with a non-working parent (“Active at home” option), the family receives 115 EUR per month.

The main objective of the program is to increase the number of women returning to work after the period of maternity and parental leave (which in Poland cover the first 12 months of a newborn), before the child becomes eligible for kindergarten (where a place for each child aged 3 to 6 years is to be guaranteed by the local government). It is worth noting that after exhausting the parental leave, Polish parents are entitled to up to 3 years of childcare leave. Though this is unpaid, many parents, once again almost entirely mothers, opt for staying at home, often due to the lack of alternative forms of childcare. For children under the age of 3, formal childcare is highly limited. In 2023, nursery places were available only to one out of four children aged 0-3 years (CSO Poland). Additionally, these places are unevenly accessible throughout the country – in 2023 formal childcare for the youngest kids (public or private) did not exist in as many as 45 percent of Polish municipalities (CSO Poland). At the same time, while family help with childcare in Poland is still provided on a massive scale, it is limited only to those who have parents or other family members living close by, already in retirement and without other caring obligations (e.g. for older generations).

Within the new program parents who receive the “Active at work” benefit have complete discretion of how to use these funds. Many may choose to send the child to a formal childcare institution, but the lawmakers also expect a surge in undertaking formal contracts with grandparents or other relatives – including those already in retirement. There’s an additional benefit embedded in this particular solution, namely social security contributions resulting from contracts concluded with “a carer” (regardless of if it is a third person or a family member) which are covered by the state. These contributions are added to the carer’s pension funds and translate into higher retirement benefits – with regular recalculations of pension funds among those already retired and higher expected pension benefits for those still below retirement age.

A recent policy report (Myck, Krol and Oczkowska, 2024), evaluated the impact of the “Active parent” program using the microsimulation model SIMPL. The analysis (based on the Polish Household Budget Survey from 2021) focused on the estimation of the expected costs of the program to the public budget and the distribution of financial gains among households. We find that families eligible to receive support, i.e. those with children aged 12-35 months, are concentrated in the upper half of the income distribution (12.6 percent among the richest households and only 5.4 percent living in the poorest households). Thus, taking the observed work and childcare use patterns from the data we find that the average net gains related to the entire “Active parent” program are also concentrated among the richer households (see Figure 2).

Figure 2. Average net monthly gain from the “Active parent” program, assuming no change in parental behavior in reaction to the roll-out of the program

Source: Authors’ calculation with SIMPL microsimulation model based on the Polish Household Budget Survey 2021 data, indexed to 2024. Note: Introduction of the new program automatically withdrew the existing support targeted at families with children in the respective age range: “Family Childcare Fund” of 115 EUR/month for families with the second or next child aged 12-35 months and the co-payment for nursery up to 90 EUR/month. 1 EUR = 4.3 PLN.

Households from the highest income decile group on average gain 220 EUR per month, while those from the poorest income group receive 170 EUR per month. In relative terms, these gains correspond on average to as much as 17 percent of their income, while for the former group the gains do not exceed 4 percent of their income. When disaggregating by the three options of the program, eligible households from the bottom part of the distribution receive much higher gains from the “Active in nursery” or “Active at home” options, as these households are much less likely to have both parents working.

Clearly, some parents may adjust their work and childcare choices in reaction to the introduction of the program, which, in fact, is one of its key objectives. If a family decides to take up work or send their child to a nursery, they become eligible for higher support. Rather than receiving 115 EUR from the “Active at home” option, they become eligible for up to 350 EUR under the other alternative options. In almost 200 000 out of the overall 550 000 families with an age-eligible child, one of the parents (usually the mother) is observed to be out of work. Using this, we estimate the likelihood of taking up work among these non-working mothers and conditional on the expected probabilities of employment we assigned additional families to the two more generous options of the program – either to “Active at work” (those with highest work probability) or to “Active in nursery” (those with lowest work probability). This allows us to evaluate potential changes in the cost and distributional implications of the program under different scenarios. Table 1 presents a set of “gross” and “net” costs of selected combinations of parental reactions. The “gross” costs correspond to the total expenditure of the “Active parent” program, while the “net” costs account first for the withdrawal of previous policies (see note to Figure 2), and second for the budget gains related to taxes and social insurance contributions paid by the parents who are simulated to take up work.

Table 1. “Active parent”: aggregate costs to the public budget under different assumptions concerning work and childcare adjustments among parents

Source: see Figure 2.

Assuming no change in parental behavior (0 percent increase in work and 0 percent increase in enrollment in nursery), the total, “gross” cost of the program for the public finances amounts to 1.72 bn EUR, on average, annually. Savings related to the withdrawal of existing policies lower this cost by 0.5 bn EUR. Any modelled increase in nursery enrollment (with no concurrent reaction in the labor market) means an increase in both the “gross” and the “net” costs, while on the other hand an increase in labor market participation of the non-working parent (when nursery enrollment is held constant) expands the “gross” costs but reduces the “net” costs due to higher taxes and contributions paid in relation to simulated additional earnings.

The final distributional household effects of the program will depend on the actual reactions among parents. However, according to our simulations, the families who are most likely to either increase employment of the second parent or sign up their child for a nursery, and, thus, gain from  the “Active at work” or “Active in nursery” options, are those currently located in the 2nd, 3rd, and 4th income decile group in the distribution (for more details see: Myck, Krol and Oczkowska, 2024).

Conclusion

The main objective behind the introduction of the new “Active parent” scheme is to increase the labor market participation among mothers with the youngest children. As the program aims to facilitate balancing professional careers with family life among parents, it can also be expected to contribute to increases in the fertility rate, which has recently fallen in Poland from 1.45 in 2017 to 1.16 in 2023 (CSO Poland).

The success of the “Active parent” program should be evaluated with respect to three important indicators:

  • the resulting increase in the number of mothers who have taken up work,
  • the increase in the number of children registered for nurseries,
  • and, related to the latter – the increase in the availability of childcare places in different Polish municipalities.

It is worth noting that the “Active parent” program was introduced in parallel with the prior “Toddler +” program that aimed at creating new childcare institutions and more places in the existing ones in 2022-2029 in Poland. Central funding was distributed to reach these goals among local governments and private care providers. However, a 2024 midterm audit of the “Toddler +” program demonstrated the progress to be “insufficient and lagging” (Supreme Audit Office Poland, 2024). The “Active parent” program will play an important role in providing additional stimulus to the provision of new childcare places for the youngest kids in different Polish regions, which should help the “Toddler +” program to finally gather momentum. In the medium and long run, the development of high-quality formal childcare for children below 3 years will be a crucial determinant of an increase in early return to work among mothers.

Acknowledgment

The authors wish to acknowledge the support of the Swedish International Development Cooperation Agency (Sida) under the FROGEE project. The views presented in the Policy Brief reflect the opinions of the Authors and do not necessarily overlap with the position of the FREE Network or Sida.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Gender Gap in Life Expectancy and Its Socio-Economic Implications

Posted on October 1, 2024 | FROGEE PROJECT, Policy Brief

Silhouetted crowd of people walking in a public square, symbolizing societal impacts of the gender gap in life expectancy.

Today women live longer than men virtually in every country of the world. Although scientists still struggle to fully explain this disparity, the most prominent sources of this gender inequality are biological and behavioral. From an evolutionary point of view, female longevity was more advantageous for offspring survival. This resulted in a higher frequency of non-fatal diseases among women and in a later onset of fatal conditions. The observed high variation in the longevity gap across countries, however, points towards an important role of social and behavioral arguments. These include higher consumption of alcohol, tobacco, and fats among men as well as a generally riskier behavior. The gender gap in life expectancy often reaches 6-12 percent of the average human lifespan and has remained stubbornly stable in many countries. Lower life expectancy among men is an important social concern on its own and has significant consequences for the well-being of their surviving partners and the economy as a whole. It is an important, yet under-discussed type of gender inequality.

Country Reports

Belarus Country Report FROGEE POLICY BRIEF
Georgia Country Report FROGEE POLICY BRIEF
Latvia Country Report FROGEE POLICY BRIEF
Poland Country Report FROGEE POLICY BRIEF

Gender Gap in Life Expectancy and Its Socio-Economic Implications

Today, women on average live longer than men across the globe. Despite the universality of this basic qualitative fact, the gender gap in life expectancy (GGLE) varies a lot across countries (as well as over time) and scientists have only a limited understanding of the causes of this variation (Rochelle et al., 2015). Regardless of the reasons for this discrepancy, it has sizable economic and financial implications. Abnormal male mortality makes a dent in the labour force in nations where GGLE happens to be the highest, while at the same time, large GGLE might contribute to a divergence in male and female discount factors with implications for employment and pension savings. Large discrepancies in life expectancy translate into a higher incidence of widowhood and a longer time in which women live as widows. The gender gap in life expectancy is one of the less frequently discussed dimensions of gender inequality, and while it clearly has negative implications for men, lower male longevity has also substantial negative consequences for women and society as a whole.

Figure A. Gender gap in life expectancy across selected countries

Source: World Bank.

The earliest available reliable data on the relative longevity of men and women shows that the gender gap in life expectancy is not a new phenomenon. In the middle of the 19th century, women in Scandinavian countries outlived men by 3-5 years (Rochelle et al., 2015), and Bavarian nuns enjoyed an additional 1.1 years of life, relative to the monks (Luy, 2003). At the beginning of the 20th century, relative higher female longevity became universal as women started to live longer than men in almost every country (Barford et al., 2006). GGLE appears to be a complex phenomenon with no single factor able to fully explain it. Scientists from various fields such as anthropology, evolutionary biology, genetics, medical science, and economics have made numerous attempts to study the mechanisms behind this gender disparity. Their discoveries typically fall into one of two groups: biological and behavioural. Noteworthy, GGLE seems to be fairly unrelated to the basic economic fundamentals such as GDP per capita which in turn has a strong association with the level of healthcare, overall life expectancy, and human development index (Rochelle et al., 2015). Figure B presents the (lack of) association between GDP per capita and GGLE in a cross-section of countries. The data shows large heterogeneity, especially at low-income levels, and virtually no association from middle-level GDP per capita onwards.

Figure B. Association between gender gap in life expectancy and GDP per capita

Source: World Bank.

Biological Factors

The main intuition behind female superior longevity provided by evolutionary biologists is based on the idea that the offspring’s survival rates disproportionally benefited from the presence of their mothers and grandmothers. The female hormone estrogen is known to lower the risks of cardiovascular disease. Women also have a better immune system which helps them avoid a number of life-threatening diseases, while also making them more likely to suffer from (non-fatal) autoimmune diseases (Schünemann et al., 2017). The basic genetic advantage of females comes from the mere fact of them having two X chromosomes and thus avoiding a number of diseases stemming from Y chromosome defects (Holden, 1987; Austad, 2006; Oksuzyan et al., 2008).

Despite a number of biological factors contributing to female longevity, it is well known that, on average, women have poorer health than men at the same age. This counterintuitive phenomenon is called the morbidity-mortality paradox (Kulminski et al., 2008). Figure C shows the estimated cumulative health deficits for both genders and their average life expectancies in the Canadian population, based on a study by Schünemann et al. (2017). It shows that at any age, women tend to have poorer health yet lower mortality rates than men. This paradox can be explained by two factors: women tend to suffer more from non-fatal diseases, and the onset of fatal diseases occurs later in life for women compared to men.

Figure C. Health deficits and life expectancy for Canadian men and women

Source: Schünemann et al. (2017). Note: Men: solid line; Women: dashed line; Circles: life expectancy at age 20.

Behavioural Factors

Given the large variation in GGLE, biological factors clearly cannot be the only driving force. Worldwide, men are three times more likely to die from road traffic injuries and two times more likely to drown than women (WHO, 2002). According to the World Health Organization (WHO), the average ratio of male-to-female completed suicides among the 183 surveyed countries is 3.78 (WHO, 2024). Schünemann et al. (2017) find that differences in behaviour can explain 3.2 out of 4.6 years of GGLE observed on average in developed countries. Statistics clearly show that men engage in unhealthy behaviours such as smoking and alcohol consumption much more often than women (Rochelle et al., 2015). Men are also more likely to be obese. Alcohol consumption plays a special role among behavioural contributors to the GGLE. A study based on data from 30 European countries found that alcohol consumption accounted for 10 to 20 percent of GGLE in Western Europe and for 20 to 30 percent in Eastern Europe (McCartney et al., 2011). Another group of authors has focused their research on Central and Eastern European countries between 1965 and 2012. They have estimated that throughout that time period between 15 and 19 percent of the GGLE can be attributed to alcohol (Trias-Llimós & Janssen, 2018). On the other hand, tobacco is estimated to be responsible for up to 30 percent and 20 percent of the gender gap in mortality in Eastern Europe and the rest of Europe, respectively (McCartney et al., 2011).

Another factor potentially decreasing male longevity is participation in risk-taking activities stemming from extreme events such as wars and military activities, high-risk jobs, and seemingly unnecessary health-hazardous actions. However, to the best of our knowledge, there is no rigorous research quantifying the contribution of these factors to the reduced male longevity. It is also plausible that the relative importance of these factors varies substantially by country and historical period.

Gender inequality and social gender norms also negatively affect men. Although women suffer from depression more frequently than men (Albert, 2015; Kuehner, 2017), it is men who commit most suicides. One study finds that men with lower masculinity (measured with a range of questions on social norms and gender role orientation) are less likely to suffer from coronary heart disease (Hunt et al., 2007). Finally, evidence shows that men are less likely to utilize medical care when facing the same health conditions as women and that they are also less likely to conduct regular medical check-ups (Trias-Llimós & Janssen, 2018).

It is possible to hypothesize that behavioural factors of premature male deaths may also be seen as biological ones with, for example, risky behaviour being somehow coded in male DNA. But this hypothesis may have only very limited truth to it as we observe how male longevity and GGLE vary between countries and even within countries over relatively short periods of time.

Economic Implications

Premature male mortality decreases the total labour force of one of the world leaders in GGLE, Belarus, by at least 4 percent (author’s own calculation, based on WHO data). Similar numbers for other developed nations range from 1 to 3 percent. Premature mortality, on average, costs European countries 1.2 percent of GDP, with 70 percent of these losses attributable to male excess mortality. If male premature mortality could be avoided, Sweden would gain 0.3 percent of GDP, Poland would gain 1.7 percent of GDP, while Latvia and Lithuania – countries with the highest GGLE in the EU – would each gain around 2.3 percent of GDP (Łyszczarz, 2019). Large disparities in the expected longevity also mean that women should anticipate longer post-retirement lives. Combined with the gender employment and pay gap, this implies that either women need to devote a larger percentage of their earnings to retirement savings or retirement systems need to include provisions to secure material support for surviving spouses. Since in most of the retirement systems the value of pensions is calculated using average, not gender-specific, life expectancy, the ensuing differences may result in a perception that men are not getting their fair share from accumulated contributions.

Policy Recommendations

To successfully limit the extent of the GGLE and to effectively address its consequences, more research is needed in the area of differential gender mortality. In the medical research dimension, it is noteworthy that, historically, women have been under-represented in recruitment into clinical trials, reporting of gender-disaggregated data in research has been low, and a larger amount of research funding has been allocated to “male diseases” (Holdcroft, 2007; Mirin, 2021). At the same time, the missing link research-wise is the peculiar discrepancy between a likely better understanding of male body and health and the poorer utilization of this knowledge.

The existing literature suggests several possible interventions that may substantially reduce premature male mortality. Among the top preventable behavioural factors are smoking and excessive alcohol consumption. Many studies point out substantial country differences in the contribution of these two factors to GGLE (McCartney, 2011), which might indicate that gender differences in alcohol and nicotine abuse may be amplified by the prevailing gender roles in a given society (Wilsnack et al., 2000). Since the other key factors impairing male longevity are stress and risky behaviour, it seems that a broader societal change away from the traditional gender norms is needed. As country differences in GGLE suggest, higher male mortality is mainly driven by behaviours often influenced by societies and policies. This gives hope that higher male mortality could be reduced as we move towards greater gender equality, and give more support to risk-reducing policies.

While the fundamental biological differences contributing to the GGLE cannot be changed, special attention should be devoted to improving healthcare utilization among men and to increasingly including the effects of sex and gender in medical research on health and disease (Holdcoft, 2007; Mirin, 2021; McGregor et al., 2016, Regitz-Zagrosek & Seeland, 2012).

References

About FROGEE Policy Briefs

FROGEE Policy Briefs is a special series aimed at providing overviews and the popularization of economic research related to gender equality issues. Debates around policies related to gender equality are often highly politicized. We believe that using arguments derived from the most up to date research-based knowledge would help us build a more fruitful discussion of policy proposals and in the end achieve better outcomes.

The aim of the briefs is to improve the understanding of research-based arguments and their implications, by covering the key theories and the most important findings in areas of special interest to the current debate. The briefs start with short general overviews of a given theme, which are followed by a presentation of country-specific contexts, specific policy challenges, implemented reforms and a discussion of other policy options.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Active Labor Market Policy in the Baltic-Black Sea Region

Posted on June 3, 2024 | Policy Brief

Image that shows an overhead view of a large, open pedestrian area with people walking and standing around representing active labour market policy.

This brief outlines the characteristics of active labor market policy (ALMP) in four countries in the Baltic-Black Sea region: Belarus, Lithuania, Poland, and Ukraine. An analysis of the financing expenditure structure within this framework reveals significant differences between the countries, even for Poland and Lithuania, where the policies are to be set within a common EU framework. Countries also differed in terms of their ALMP reaction to the economic challenges brought about by the Covid-19 pandemic, as Poland and Lithuania increased their ALMP spending, while Ukraine, and, especially, Belarus, lagged behind. Despite these differences, all four countries are likely to benefit from a range of common recommendations regarding the improvement of ALMP. These include implementing evidence-informed policymaking and conducting counterfactual impact evaluations, facilitated by social partnership. Establishing quantitative benchmarks for active labor market policy expenditures and labor force coverage by active labor market measures is also advised.

Introduction

This policy brief builds on a study aimed at conducting a comparative analysis of labor market regulation policies in Belarus, Ukraine, Lithuania, and Poland. In comparing the structure of labor market policy expenditures, the aim was to identify common features between Poland and Lithuania, both of which are part of the EU and employ advanced labor market regulation approaches. We also assessed Ukraine’s policies, currently being reformed to align with EU standards, contrasting them with Belarus, where economic reforms are hindered by the post-Soviet authoritarian regime.

The analysis of the labor market policies for the considered countries is based on an evaluation of the structure of pertinent measures between 2017 and 2020 (Mazol, 2022). We used the 2015 OECD systematization of measures of active labor market policy, as presented in the first column of Table 1.

Our study reveals substantial differences in active labor market policies within the four considered countries. Still, motivated by OECD’s approach to ALMP, we provide a range of common policy recommendations that are relevant for each country included in the study. Arguably, aligning with the OECD approach would have more value for current EU and OECD members, Poland and Lithuania, and the aspiring member, Ukraine. However, these recommendations also hold value when considering a reformation of the Belarusian labor market policy.

ALMP Expenditures in Belarus, Lithuania, Poland and Ukraine

Labor market policy comprises of active and passive components. Active labor market policy involves funding employment services and providing various forms of assistance to both unemployed individuals and employers. Its primary objective is to enhance qualifications and intensify job search efforts to improve the employment prospects of the unemployed (Bredgaard, 2015). Passive labor market policy (PLMP) encompasses measures to support the incomes of involuntarily unemployed individuals, and financing for early retirement.

Poland and Lithuania are both EU and OECD members, so one would expect their labor market policies to be driven by the EU framework, and, thus, mostly aligned. However, our analysis showed that the structure of their expenditures on active labor market policies in 2017-2019 differed (Mazol, 2022). In Lithuania, the majority of the funding was allocated to employment incentives for recruitment, job maintenance, and job sharing. From 2017 to 2019, the share for these measures was between 18 and 28 percent of all expenditures for state labor market regulation. In Poland, the majority of funding was allocated to measures supporting protected employment and rehabilitation. The spending on these measures fluctuated between 23 and 34 percent of all expenditures for state labor market regulation between 2017 and 2019.

The response to the labor market challenges during the Covid-19 pandemic in Poland and Lithuania resulted in a notable surge in state labor market policy spendings in 2020, amounting to 1.78 percent of GDP and 2.83 percent of GDP, respectively. Both countries sharply increased the total spending on employment incentives (see Table 1 which summarizes the expenditure allocation for 2020). Poland experienced a nine-fold increase in costs for financing these measures (29.4 percent of total expenditures on state labor market regulation). Meanwhile, in Lithuania, financing for employment incentives increased more than tenfold, amounting to 42.5 percent of all expenditures for state labor market regulation. In both countries it became the largest active labor market policy spending area.

Table 1. Financing of state labor market measures in Baltic-Black Sea region countries in 2020 (in millions of Euro).

Source: DGESAI, 2023. Author’s estimations based on World Bank data (World Bank, 2023), National Bank of Belarus data, National Bank of Ukraine data.

In Ukraine, the primary focus for active labor market policy expenditures was, from 2017 to 2020, directed towards public employment services, comprising 18 to 24 percent of total labor market policy expenditures. Notably, despite the Covid-19 pandemic, there were no significant changes in either the structure or the volume of active labor market policy expenditures in Ukraine in 2020. Despite Ukraine’s active efforts to align its economic and social policies with EU standards, the government has underinvested in labor market policy, with expenditures accounting for only 0.33-0.37 percent of GDP between 2017 and 2020. This is significantly below the levels observed in Lithuania and Poland.

In Belarus, labor market policy financing is one of the last priorities for the government. In 2020, financing accounted for about 0.02 percent of GDP, amounts clearly insufficient for having a significant impact on the labor market. Moreover, Belarus stood out as the sole country in the reviewed group to have reduced its funding for labor market policies, including both active and income support measures, during the Covid-19 pandemic. The majority of the financing for labor market policy has been directed towards protected and supported employment and rehabilitation, including job creation initiatives for former prisoners, the youth and individuals with disabilities.

ALMP Improvement Recommendations

As illustrated above, the countries under review do not have a common approach to active labor market policy spendings. Further, countries like Poland and Lithuania took a more flexible stance on addressing labor market challenges caused by the Covid-19 pandemic, by implementing additional financial support for active labor market policies. However, Ukraine and Belarus did not adjust their expenditure structures accordingly. Part of these cross-country differences can be attributed to differing legal framework: Poland and Lithuania are OECD and EU member states, and, thus, subject to corresponding regulations. Ukraine is in turn motivated by the prospects of EU accession, while Belarus currently has no such prosperities to take into account.

Another important source of deviation arises from the differences in current labor market and economic conditions in the respective countries, and the governments’ need to accommodate these. While such a market-specific approach is well-justified, aligning expenditure structures with current labor market conditions necessitates obtaining updated and reliable information about the labor market situation and the effectiveness of specific labor market measures or programs. An effective labor market policy thus requires establishing a reliable system for assessing the efficiency of government measures, i.e., deploying evidence-informed policy making (OECD, 2022).

To achieve this, it is crucial to establish a robust system for monitoring and evaluating the implementation of specific measures. This involves leveraging data from various centralized sources, enhancing IT infrastructure to support data management, and utilizing modern methodologies such as counterfactual impact evaluations (OECD, 2022).

Moreover, an effective labor market regulation policy necessitates the ability to swiftly adapt existing active measures and service delivery methods in response to changes in the labor market. This might entail rapid adjustments in the legal framework, underscoring the importance of close cooperation and coordination among key stakeholders, and a well-functioning administrative structure (Lauringson and Lüske, 2021).

To accomplish this objective, it is vital to foster close collaboration between the government and institutions closely intertwined with the labor market, capable of providing essential information to labor market regulators. One of the most useful tools in this regard appears to be so-called social partnerships – a form of a dialogue between employers, employees, trade unions and public authorities, involving active information exchange and interaction (OECD, 2022).

A reliable system to assess labor market policy and in particular to facilitate their targeting, is an essential component of this approach.

Ukraine and Belarus are underfunding their labor market policies, both in comparison to the levels observed in Poland and Lithuania, and in absolute terms. It is therefore advisable to establish quantitative benchmark indicators to act as guidance for these countries, in order to ensure that any labor market policy implemented is adequately funded. Here, a reasonable approach is to align the costs of implementing labor market measures with the average annual levels for OECD countries (which are 0.5 percent of GDP for active measures and 1.63 percent for total labor market policy expenditures (OECD, 2024). Furthermore, it’s essential to ensure a high level of labor force participation in active labor market regulation measures. A target standard could be set, based on the average annual coverage from active labor market measures, at 5.8 percent of the national economy labor force, as observed in OECD countries (OECD, 2024).

Conclusion

The countries under review demonstrate varying structures of active labor market expenditures. Prior to the Covid-19 pandemic, employment incentives received the most financing in Lithuania. In Poland the largest share of expenditures was instead directed to measures to support protected employment and rehabilitation. In Ukraine, the main expenditures were directed towards financing employment services and unemployment benefits while Belarus primarily allocated funds to protected and supported employment and rehabilitation. Notably, Lithuania and Poland responded to the economic challenges following Covid-19 by significantly increasing spending on employment incentives, while Ukraine and Belarus did not undertake such measures.

Part of the diverging patterns may be attributable to the countries varying legal framework and differences in the countries respective labor market and economic conditions.

While some of the differences in labor market policies are thus justified, ensuring funding at the OECD level for labor market measures, alongside adequate tools for monitoring and evaluating labor market policies, are likely to benefit all four Baltic-Black Sea countries.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Widowhood in Poland: Reforming the Financial Support System

Posted on April 22, 2024 | Policy Brief

Image representing a woman and a young girl emphasizing the bond between the mother and child representing financial support system.

Drawing on a recent Policy Paper, we analyse the degree to which the current system of support in widowhood in Poland limits the extent of poverty among this large and growing group of the population. The analysis is set in the context of a proposed reform discussed recently in the Polish Parliament. We present the budgetary and distributional consequences of this proposal and offer an alternative scenario that limits the overall cost of the policy and directs additional resources to low-income households.

Introduction

Losing a partner usually comes with consequences, both for mental health and psychological well-being (Adena et al., 2023; Blanner Kristiansen et al., 2019; Lee et al., 2001; Steptoe et al., 2013), and for material welfare. Economic deprivation may be particularly pronounced in cases of high-income differentials between spouses and in situations when the primary earner – often the man – dies first. Many countries have instituted survivors’ pensions, whereby the surviving spouse continues to receive some of the income of her/his deceased partner alongside other incomes. The systems of support differ substantially between countries and they often combine social security benefits and welfare support for those with lowest incomes.

In this policy brief, we summarise the results from a recent paper (Myck et al., 2024) and discuss the material situation of widows versus married couples in Poland. We show the degree to which the ‘survivors’ pension’, i.e. the current system of support in widowhood, limits the extent of poverty among widows and compare it to a proposed reform discussed lately in the Polish Parliament, the so-called ‘widows’ pension’. In light of the examined consequences from this proposal, we relate it to an alternative scenario, which – as we demonstrate – brings very similar benefits to low-income widows, but, at the same time, substantially reduces the cost of the policy.

Reforming the System of Support in Widowhood

Our analysis draws on a sample of married couples aged 65 and older from the Polish Household Budget Survey – a group representing a large part of the Polish population (almost 1,7 million couples). Each of these couples is assigned to an income decile, depending on the level of their disposable income. Incomes of 9.5 percent of the sample locate them in the bottom decile, i.e. the poorest 10 percent of the population, while 4.4 percent of these older couples have incomes high enough to place them in the top income group – the richest 10 percent of the population.

Next, in order to examine the effectiveness of the different systems of support, we conduct the following exercise: the incomes of these households are re-calculated assuming the husbands have passed away. This simulates the incomes of the sampled women in hypothetical scenarios of widowhood. The incomes are calculated under four different systems of support as summarized in Table 1.

Table 1. Modelled support scenarios.

Using these re-calculated household incomes, we can identify the relative position in the income distribution in the widowhood scenario as well as the poverty risk among widows under different support systems.

The change in the relative position in the income distribution following widowhood under the four support systems is presented in Figure 1. The starting point (the left-hand side of each chart) are the income groups of households with married couples aged 65+, i.e. before the simulated widowhood. The transition to the income deciles on the right-hand side of each chart is the result of a change in equivalised (i.e. adjusted for household composition) disposable income in the widowhood simulation, under different support scenarios (I – IV).

Figure 1. Change in income decile among women aged 65+, following a hypothetical death of their husbands.

Source: Own calculations based on HBS 2021 using SIMPL model; graphs were created using: https://flourish.studio/

Figure 1a shows that, without any additional support, the financial situation of older women would significantly deteriorate in the event of the death of their spouses (Figure 1a). The share of women with incomes in the lowest two deciles would be as high as 54.7 percent (compared to 17.5 percent of married couples). The current survivor’s pension seems to protect a large proportion of women from experiencing large reductions in their income (Figure 1b), although the proportion of those who find themselves in the lowest two income decile groups more than doubles relative to married couples (to 38.3 percent). The widow’s pension (Figure 1c) offers much greater support and a very large share of new widows remain in the same decile or even move to a higher income group following the hypothetical death of their spouses. For example, with the widows’ pension, 8.0 percent of the widows would be in the 9th income decile group and 5.3 percent in the 10th group, while in comparison 7.0 and 4.4 percent of married couples found themselves in these groups, respectively. The proposed alternative system (Figure 1d) raises widows’ incomes compared to the current survivor’s pension system, but it is less generous than the system with the widow’s pension. At the same time 4.6 percent and 3.4 percent of widows would be found in the 9th and 10th deciles, respectively.

Importantly, the alternative support system is almost as effective in reducing the poverty risk among widows as the widow’s pension. In the latter case the share of at-risk-of poverty drops from 35.3 percent (with no support) and 20.7 percent (under the current system) to 11,0 percent, while under the alternative system, it drops to 11.8 percent. Because the alternative system limits additional support to households with higher incomes, this reduction in at-risk-of poverty would be achieved at a much lower cost to the public budget. We estimate that while the current reform proposal would result in annual cost of 24.1 bn PLN (5.6 bn EUR), the alternative design would cost only 10.5 bn PLN (2.5 bn EUR).

The distributional implications of the two reforms are presented in Figure 2 which shows the average gains in the incomes of ‘widowed’ households between the reformed versions of support and the current system with the survivor’s pension. The gains are presented by income decile of the married households. We see that the alternative system significantly limits the gains among households in the upper half of the income distribution.

Figure 2. Average gains from an implementation of the widow’s pension and the alternative system, by income decile groups.

Source: Own calculations based on HBS 2021 using the SIMPL model. Notes: Change in the disposable income with respect to the current system with survivor’s pension. 1PLN~0.23EUR.

Conclusions

While subjective evaluations of the material conditions of older persons living alone in Poland have shown significant improvements, income poverty within this groups has increased since 2015. This suggests that the incomes of older individuals have not sufficiently kept up with the dynamics of earnings of and social transfers to other social groups in Poland. As shown in our simulations, the current widowhood support system substantially limits the risk of poverty following the death of one’s partner. However, while the current survivor’s pension decreases the poverty risk from 35.3 percent in a system without any support to 20.7 percent, the risk of poverty among widows is still significantly higher compared to the risk faced by married couples.

The simulations presented in this Policy Brief examine the implications of a support system reform; the widow’s pension which is currently being discussed in the Polish Parliament, as well as an alternative proposal putting more emphasis on poorer households. The impactof these two reforms on the at-risk-of poverty levels among widowed individuals would be very similar, but the design of the alternative system would come at a significantly lower cost to the public budget. The total annual cost to the public sector of the widow’s pensions would amount to 24.1 bn PLN (5.6 bn EUR) while our proposed alternative would cost only 10.5 bn PLN (2.5 bn EUR) per year.

An effective policy design allowing the government to achieve its objectives at the lowest possible costs should always be among the government’s main priorities. This is especially important in times of high budget pressure – due to demographic changes or other risks – as is currently the case in Poland.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.