shadow employment. In fact, the estimated share of shadow workers among the new workers has been stable and then increasing until 2007. It fell only in 2008, almost exactly copying the dynamics of the general estimated share of shadow employment in total employment (see last raw of Table 3). In other words; although the general observed probability of employment in shadow economy for new workers kept increasing until 2007, this increase was not necessarily related to the fact that they were new.

The analysis of the ―contract‖ coefficients leads to similar conclusions. It seems obvious that the newly hired are more often employed fixed term and also to some extent part time. More precisely, the fact that an employed person is on a fixed term contract increases the probability that she/he is newly hired. This tendency (similarly as in case of shadow employment) seems to weaken over the analyzed period, although the results here are not so clear. The part time and fixed-term employment coefficients fell until 2005, and then started to stabilize and increase. Once again these results tell us that any kind of employment other than full time and open term contracts is less and less dependent on the fact that the person is newly employed. Actually, the share of such contracts among the newly employed was increasing until 2007 and then decreased in 2008 copying the general trend (see Table 4 – last row).

**Table 3 - The relationships (estimated coefficients) between being a new employee, shadow employment and the type of contract**

|**Model/variable**|**2003/2004**|**2004/2005**|**2005/2006**|**2006/2007**|**2007/2008**|
|---|---|---|---|---|---|
|Shadow – onlyshadow variable used|0.37154|0.30424|0.29312|0.30844|0.27085|
|Shadow – both variables used|0.08605|0.079|0.06387|0.04184|0.03406|
|**Contract –only contract variable use**|**d**<br>|||||
|full time,fixed term|0.25178|0.21509|0.18054|0.2046|0.16998|
|part time,open term|0.0625|0.03078|0.05713|0.0434|0.06489|
|part time,fixed term|0.30764|0.21786|0.21479|0.25631|0.25355|
|Self employed|0.02912|0.01158|insignificant|0.02537|0.02223|
|**Contract – both variables used**<br>||||||
|full time,fixed term|0.22049|0.18887|0.16123|0.18912|0.15669|
|part time,open term|0.05209|0.02432|0.05182|0.03824|0.05606|
|part time,fixed term|0.21681|0.14191|0.15605|0.21274|0.21071|
|self employed|0.0189|insignificant|insignificant|0.02086|0.01549|
|**The estimated share of shadow emplo**<br>% of all newly employed in shadow<br>employment|**yment in total e**<br>8.7%|**mployment amon**<br>8.7%|**g the newly empl**<br>9.1%|**oyed.**<br>9%|8.5%|

Source: Author‘s calculations based on CASE_2007 and LFS datasets for Poland. Notes: Base category for contract variable = full time, open term contract The last step of the analysis is to examine the relationship between shadow employment and relative probability of transitions between various types of labor contracts or out of employment. However before engaging in an econometric estimation, it is interesting to observe the actual labor market transitions for groups with various labor market positions.

It is obvious that for any type of labor arrangement the highest is the probability that in the next year – ―t+1‖ (see Table 4) the labor market status will be the same as in current year – ―t‖. The continuation of the same labor market arrangement is the most natural behavior on the labor market. On the other hand, the strength of this stability depends on the nature of the labor market arrangements as such and also on the general situation of the market.

At first those with full time and open term contracts and the self employed are the two most stable groups. Over the entire period, more than 90% of those with either of these working arrangements in time ―t‖ did not change it within a year. The same applies to those who are