The Nomenklatura System in Poland, 1978-1987: A Case of Political Segmentation of the Labor Market

In the 1950s in Eastern Europe, the Communist Party exerted control over all important jobs through the Nomenklatura system. This paper investigates how the gradual disintegration of the party apparatus and how the legitimacy crisis affect the role of the Nomenklatura system in determining income. Using survey data collected in Poland in 1978 and 1987, the effect of the Nomenklatura system on income distribution is compared over time. We find that rapid social change in Poland led to a disintegration of the income determination mechanism based on human capital factors. The Nomenklatura system is found to have successfully pursued its interests through the process of restructuring income determination mechanism; over time, the net effect of the Nomenklatura system increased. Empirical analyses also demonstrate that the Nomenklatura system enhanced the human capital of incumbents, even in the face of growing erosion in the ideological and economic hegemony of the party-state.