Over the past two decades, Poland has experienced pronounced economic and institutional changes. The transition to a market economy started in 1990 with radical and comprehensive reforms aimed at eliminating detailed state intervention in both labour and product markets (Balcerowicz, 1994). The reform strategy dealt not only with the type of measures, but also with their phasing – they were all launched simultaneously and proceeded at a high rate in what has been referred to as ‘shock therapy’. In the literature on typologies of reforms in the Central and Eastern European (CEE) region, Poland was identified as one of the ‘reform leaders’ (de Melo et al, 1996; Sachs, 1996; Wolf, 1999).

Increasing competition, restructuring and privatisation necessitated massive layoffs. The government set up social security schemes for workers losing their jobs, but due to public finance constraints the generousness of these schemes was soon substantially reduced. Poland's recovery from the transitional recession was spectacular – by 1992 it had already regained its pre-reform gross domestic product (GDP) level, and employment increased throughout the mid-1990s. Still, further growth was brought to a halt by the Russian crisis in 1999, which contributed to dramatic cuts in employment, and the global economic slowdown in 2001 further deepened the country's recession. Nevertheless, after hovering for a while at approximately 20%, the unemployment rate has plummeted since 2004.

The introduction of market rules into the labour market resulted in increasing income inequality, with a growing wage premium for highly skilled workers. Partly as a response to rising returns to skills and partly due to reforms allowing for the establishment of private education institutions, rapid tertiary education expansion has taken place. Higher education enrolment rates increased more than threefold between 1989 and 2004. Still, the challenges connected with the quality of schooling – also at the tertiary level – and the need to reform the system of vocational education remain unresolved.

Education system

Structure of the Polish education system

Overview of the Polish education system after the Second World War

The Polish education system during the socialist period consisted of the three conventional sectors: primary, secondary and post-secondary. Until 1969, primary education included seven years of schooling and was thereafter changed to eight years. The choice of secondary schools after the completion of primary school was the crucial decision that determined the allocation of education to students of different social backgrounds.