Employment prospects in Hungary – present and future

Abstract

For years the Hungarian labour market has been unable to get out from its imbalanced state accompanied by an extremely low level of employment. In spite of the continuously expanding productivity, the growth in employment practically stopped in 2000. This low employment rate is backed by a high rate of inactivity and not of unemployment, and it is mainly due to the very low job seeking activity of the those out of work. This study analyses four questions. What are the special characteristics of the Hungarian employment situation? What are the reasons for the extremely high inactivity? What are the reasons for the increasing unemployment rate among young people in Hungary? What shall be done in order to increase the employment rate and reduce the inactivity rate at the same time, along with reducing the social and regional differences that contribute to the inactivity? This study can be summarised in the following four sentences: the most serious problems exacerbating the Hungarian employment situation are the high inactivity of people with low levels of education, the concentration and the regeneration of the those with such educational background in certain sections of the society and in certain regions. It is imperative to concentrate more on these problems, even if other, equally important problems get less funding or attention. Better and real coordination is needed between government institutions for the implementation of the required measures. The success of the employment policy measures lies in the systematic analysis of their effects, based on appropriate databases, expertise and institutional support.