Skill Mismatch and Regional Unemployment in Poland

This chapter reports the estimation of the extent to which the pattern of regional unemployment in Poland 1994–1998 can be explained by regional variations in skill levels. We find, plausibly, that higher skilled populations tend to generate lower unemployment rates and that controlling for population skill levels, lower levels of relative demand for unskilled workers raises a region’s unemployment rate. These equilibrium and mismatch structural phenomena can explain about half of the regional variance in Polish unemployment rates, and a significant amount of the variance of changes in those rates.