This report assesses the changes in social welfare and policy that have taken place in Poland during the economic transition. It tests the main hypotheses concerning changes in the role of the welfare state, workings of the labor market, the distributional consequences of transition, and more generally about the winners and losers in transition. Chapter one examines trends in social expenditure during economic transition. Chapter two focuses on changes in the labor market, including emerging risks and opportunities. Chapter three explores distributional consequences of transition.