The employment impact of Poland’s special economic zones policy

Abstract

In 1994, Poland launched a special economic zones experiment to maintain employment structures outside the major cities. Using difference-in-difference estimations, this paper evaluates whether the policy has been successful in its primary objective, which is to sustain employment in gminas (communes) more likely to be negatively affected by the economic transition. A significant and positive effect of the policy on employment is documented, but with some negative spillovers at the policy level as zones start to spread rapidly. Accounting for covariates, timing, policy spillovers and reducing imbalance through matching, the average treatment effect for employment is estimated to be 60%.