Youth employment measures assessed

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In autumn 2004, Poland's First Job programme has been in operation for over two years. Its principal objectives are the vocational activation of young people and facilitating their entry into the labour market. The programme's track record indicates that, in spite of numerous difficulties, these basic objectives are being furthered. The steps taken to date were endorsed by audit proceedings carried out by the Supreme Chamber of Control (NIK) and published in May 2004.

The First Job (Pierwsza praca) programme, launched in mid-2002 (PL0208101N), is Poland’s first national-scale programme for the vocational activation of young people, aiming to enable those entering the labour market to acquire their first work experience. The main stimulus for this coordinated action geared at facilitating school-leavers’ entry into the labour market was the high level of unemployment among people aged 15 to 24. Predictions by the Ministry of Labour (Ministerstwo Gospodarki i Pracy, MGIP) put the target group in the first year of the programme’s implementation at more than 500,000 people. The original plans envisaged the programme running until late 2003; subsequently, depending on the results, possible extension for 2004-6 would be considered.

The First Job programme comprises five components: small and medium-sized enterprises, self-employment, education, volunteer work, information/job counselling, and labour intermediation (PL0212107F). The second round of First Job has been concluded, and the programme is now in its third round, suggesting that it has been well-received. As of 2004, First Job has been integrated with the 'sector operational programme for development of human resources', which should open new possibilities in terms of 'synergy' between measures pursued by different institutions, eg among the social partners.

Operation of the programme in 2002-3

The launch of the First Job programme received mixed reviews. Some were positive, but others expressed scepticism with regard to the efficacy of such measures in combating unemployment. In the early phases of the programme’s operation, in 2002, the most serious criticisms advanced against it referred to the financial aspect as well as to specific activation measures. For instance, critics of the 'internship' component - whereby young people are taken on by employers in a state-subsidised placement of up to 12 months - argued that this scheme does little to help the participating young people land a stable job, in that the employer is much better off letting a young person go after their internship has expired and taking on a new one under the same scheme. In this way, a less than scrupulous employer would not only save itself the expense of creating a full-time job, but would continue to receive subsidies towards the internship. Furthermore, the low take-up of instruments designed to help school-leavers start up businesses of their own was taken as suggesting that this form of support is misguided.

Delays in the legislative process and the resultant absence of the necessary implementing instruments (eg a legislative Act regarding volunteer work, which forms part of First Job, was adopted only in April 2003) impeded the actual implementation of measure called for under the programme. Problems of this nature persist, as illustrated by the recent coming into force of a legislative Act regarding promotion of employment and labour market institutions, replacing the previous Act regarding employment and counteraction of unemployment (PL0405105F). The new Act incorporates many provisions that, in their essence, are favourable to First Job's intended target group (eg as regards better access to internships), but its implementation has precipitated a mild interim chaos, with labour offices refusing to refer school-leavers for internships, citing the temporary lack of a legal basis.

The first round of the First Job programme proceeded from June 2002 to May 2003. During this period, vocational activation measures of one kind or another were extended to more than 750,000 recent school-leavers (defined as people who completed a course of post-secondary education not more than one year previously). Active measures benefited 152,000 young people and other forms of support were provided to 600,000.

The target group of First Job’s second round, running from June 2003 to May 2004, was extended to include people aged 18-24 who do not have the status of a school-leaver and are unemployed. In 2003, assistance offered under the First Job programme reached 833,000 people, with active labour market initiatives involving 206,000 of them (including 176,000 school-leavers). Almost 90,000 of First Job participants in 2003, including 81,000 school-leavers, found work within three months of the conclusion of programme-related activation measures.

So far, the most popular forms of support under First Job have been internships, the refund to employers of the wages of school-leaver recruits, and training courses. The participation figures for the First Job programme over 2002-3 are provided in the table below.

*Not regarded as a form of activation.

Source: Ministry of Labour and Social Policy (Ministerstwo Pracy i Polityki Socjalnej, MPiSP) and Supreme Chamber of Control (Najwyższa Izba Kontroli, NIK) (2004)

NIK assessment

The strong and weak points of the First Job programme were summed up by the Supreme Chamber of Control (Najwyższa Izba Kontroli, NIK) (the national audit office) in a May 2004 assessment entitled 'Information on results of the control proceedings concerning discharge by the public administration of tasks with respect to vocational activation of graduates'. NIK stated that the instruments made available under the Act regarding employment and counteraction of unemployment have been put to good use in practice, but was less positive about the Act regarding facilitation of employment of school-leavers. Measures taken under the First Job programme have been financed almost entirely out of the Labour Fund (Fundusz Pracy), a government-administered fund to which employers contribute on an obligatory basis (PL0212106F). A total of PLN 227.7 million expended on First Job in 2002 and PLN 496.8 million in 2003 was drawn from the Labour Fund (accounting for 97% and 96.7% of First Job’s total budget, respectively). Contrary to initial presumptions, other sources of finance - including state grants towards infrastructure investment, Phare and PAOW aid, the resources of the Agricultural Proper Agency (Agencja Nieruchomości Rolnych, ANR) or privatisation revenue - could not be tapped to any significant extent.

As regards the success of the First Job programme in its fundamental aspect, ie finding work for its participants upon conclusion of their involvement, almost 40,000 programme participants found work in 2002 and almost 90,000 in 2003 - 42% of the school-leavers taking part. The average cost of one person’s participation in First Job amounted to PLN 2,400, and the average cost of renewed hiring approximately PLN 5,800. The average cost of one job for a graduate following participation in training stood at PLN 4,693 in 2002 and PLN 3,372 in 2003.

In its conclusions, NIK calls on the bodies administering the First Job programme to ensure that, in the future, the preparation of programmes for counteracting unemployment is preceded by 'thorough analysis of the situation in the labour market, with data held by the labour offices taken into account'. Another conclusion suggests that local labour offices receive disbursements under the programme in full payments, in amounts which would make it possible to extend the duration of the internships.

Commentary

The First Job programme is currently in its third round; this fact in itself testifies to some degree of usefulness. The programme’s general record, its many imperfections at the level of detailed actions aside, has been approved by the state audit authorities. As regards the fact that many persons taking part in the First Job programme went on to find work, it is difficult to speak in terms of a cause-and-effect mechanism. The figures are certainly optimistic, but there is always the possibility that the persons concerned would have succeeded in finding employment anyway, First Job or not. During the programme’s operation, there has been no material decrease of the unemployment rate among young people, but - then again - such an outcome was not seriously expected. First Job is only intended to facilitate the first step or two taken by young people in their careers while the general situation in Poland’s job market remains difficult. On the other hand, even such limited assistance was welcomed by the programme’s beneficiaries. (Jan Czarzasty, Institute of Public Affairs [Instytut Spraw Publicznych, ISP] and Warsaw School of Economics [Szkoła Główna Handlowa, SGH])