Does Opening the Economy Affect Labor Productivity? Estimating Full Labor Content of Trade for Poland

Michał  Przybiliński

doi:10.18778/1508-2008.9.04

Authors

Michał Przybiliński

DOI:

https://doi.org/10.18778/1508-2008.9.04

Abstract

Opening the economy was one of the most important components of transition in Poland. This process started in 1990, although some steps towards it could be seen in the late 80s.

One of the basic concepts of international trade theory is that the economy benefits from its openness to international trade. The main question put in this paper is: Can we prove, on the basis on available statistics, that changes in Polish foreign trade during the transition period influenced the effectiveness of the economy, and if so, to what extent?

The study is based on two input-output tables showing the situation in 1990 (at the beginning of transition process) and in the year 2000 (when the process was over, or near to be over). Using the i-o data allowed for investigating the phenomena at more detailed level than it is done in most studies, which concern macroeconomic scale.

To estimate the differences in labor productivity between goods produced for domestic purposes and for export, the full content of labor was calculated. The calculations were based on Leontief inverse, which allowed for including costs of materials.

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