Those born in the 1990s have been the economic winners

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

Some cohorts rode a historic acceleration; others experienced years of far more subdued growth. The pace of economic development is not an abstract statistic – it translates directly into how quickly incomes rise over a lifetime and what opportunities are available to successive generations.

In this analysis, we examine which generations of Poles benefited most from the economic boom, which developed more slowly, and what this implies for the future. All signs suggest that the next generations may not replicate the pace of growth that has underpinned today’s standard of living.

Let us begin by asking: what average rates of economic growth did different generations of Poles experience? And how does this compare with the situation in other countries around the world?

I illustrate this in the chart below. Its logic is straightforward. For each birth cohort, I calculate the average per capita economic growth recorded from the year of birth through 2025 (the latest available data). In other words, I limit the sample to people who are still alive. Naturally, the later the cohort, the fewer years of GDP per capita growth are included. For this reason, I stop with those born in 2007 (18 years of data).

What stands out most is the stark difference in the growth conditions under which those born in the mid-1990s in Poland grew up and entered adulthood, compared with their counterparts in developed economies. For example, the average lifetime economic growth for someone born in Poland in 1995 amounted to 4.1%, whereas in the United States it was just 1.6%, and in Japan and Italy it was below 1%.

Generational trends

The patterns differ across countries. In Poland, those born in the 1970s experienced the weakest economic growth. On the one hand, they missed out on the rapid expansion that followed post-war reconstruction. On the other, they came of age during the deepest downturn Poland recorded in the subsequent decades – the debt crisis of the 1980s. By way of reminder, GDP per capita did not return to its 1978 level until 1985. The average lifetime growth rate for those born in the mid-1970s has so far amounted to 2.4%.

By comparison, the average GDP per capita growth for those born between 1992 and 1995 stands at 4.1% to date. They were born during the post-transition recovery, and subsequent crises – at least in terms of GDP fluctuations – have been relatively shallow.

The “rule of 70”

Why does the pace of economic growth matter? Economists often rely on a simple rule of thumb to estimate how long it takes for income to double. This is the “rule of 70”: divide 70 by the growth rate to obtain the required time. At an annual growth rate of around 4%, this comes to roughly 17 years. By contrast, with growth of 1.7% (as for cohorts born in the 1990s in the United States), income would take more than 40 years to double. At rates below 1%, the timeframe stretches to over 70 years. The table below illustrates this relationship.

Poles born in the mid-1990s have therefore already witnessed a substantial shift in economic reality. If growth were to remain at that pace (a point to which we will return), GDP per capita would be four times higher within a few years than at the time of their birth. Their peers in Italy and Japan, by contrast, may not see their incomes even double over the course of their lifetimes.

GDP growth is not everything: unemployment

Economic growth alone does not tell the whole story; the level of GDP per capita matters as well. Those born in the 1990s in the United States, Italy and Japan started from a far higher base than their peers in Poland. To this must be added the costs of transition: high unemployment, on a scale that the United States or Japan did not experience in the post-war period.

As the chart below shows, low unemployment is a relatively recent phenomenon in Poland – rates have remained below 5% only since 2017. By comparison, in Japan the unemployment rate exceeded that threshold in just five years since 1960, with a peak of only 5.4%. In Poland, by contrast, unemployment reached 18–20% at its peak between 2001 and 2005.

Stagnation in human development

From this perspective, the cohort born in the 1990s did not have it all that easy. Their parents were likely grappling with unemployment during those years. A substantial body of academic research shows that economic crises in childhood can have lasting negative effects on earnings in adulthood. Most of this evidence, however, comes from the United States. The mechanisms are typically straightforward: a parent losing a job leads to lower investment in the child (for instance, in education). Another channel may be deteriorating nutrition or reduced access to healthcare. Both ultimately result in lower human capital, which translates into weaker earnings prospects later in life.

There is far less research for Poland, particularly on income. As a result, scholars often use height (in centimeters) as a proxy variable reflecting socio-economic conditions. Marcin Wroński of the Warsaw School of Economics (SGH) has shown that the decadal increase in Poles’ height was strongest in the first decades after the Second World War and slowed markedly in the 1980s. Following the economic transition, the average height of men plateaued, while that of women actually declined. In the cohort born in 1996, average male height was just 0.03 cm greater than in the 1990 cohort, while among women it was 0.2 cm lower. The slowdown in growth was more pronounced in areas with higher unemployment.

A projection to 2070

An important caveat to the first chart is that it covers fewer years for younger cohorts. As a thought experiment, the time horizon can be extended using the European Commission’s projections through 2070. As with any forecast, this comes with uncertainty.

There are, however, several reasons to expect Poland’s economic growth to weaken over the long term. These include convergence toward the technological frontier (and thus diminishing scope for imitation) and unfavorable demographics. According to the European Commission, the growth rate of hours worked in Poland will be negative throughout the projection horizon, reaching around –1.2% per year in 2045–50.

The resulting measure – average annual per capita economic growth over a lifetime, by year of birth – is shown above. For cohorts born between 1951 and 1996, the projection assumes a lifespan of 75 years. For later cohorts, it is capped by the Commission’s forecast horizon (2070). Thus, for someone born in 2020, the series covers 50 years: up to 2025 based on historical data, and thereafter on projections. For someone born in 1960, the vast majority of the average growth is based on historical data (65 years), with only a small portion (10 years) relying on projections.

1990s cohorts still at the top

What picture emerges for different generations if the European Commission’s projections for GDP per capita growth were to hold? Those born in the early 1990s would still enjoy the highest lifetime economic growth. However, as growth slows – particularly in the 2050s, to around 1.2–1.3% per year – their experience would come to resemble that of cohorts born in the 1950s.

Those born between 2010 and 2020 would face lower lifetime growth than any cohorts born before the economic transition. That said, it bears repeating that much can change in the meantime – especially in terms of technological progress – so these projections may well prove off the mark.

Projections suggest that growth in Poland may slow in the coming decades, owing in part to population aging, a decline in total hours worked, and the economy’s convergence toward the technological frontier. Cohorts born in the early 1990s could still expect the highest lifetime growth, though at a projected rate closer to 2.7–2.8% per year.
The highest average GDP per capita growth – so far – has been recorded by cohorts born in the early to mid-1990s (around 4.1% annually), while the lowest has affected those born in the 1970s, who lived through the debt crisis and economic stagnation of the 1980s.
According to the so-called rule of 70, at a growth rate of around 4%, income per capita can double in roughly 17 years. At a rate closer to 1% - as seen in many advanced economies – it takes about 70 years. Poles born in the mid-1990s have therefore already witnessed a profound shift in economic reality. If that pace of growth were to persist, GDP per capita would be four times higher within a few years than at the time of their birth.