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Hungary

Hungary

3. Employment & Entrepreneurship

3.1 General context

On this page
  1. Labour market situation in the country
  2. Main concepts

Labour market situation in the country

Changes caused by the political transition

The changes brought about by the end of communism had a serious impact on the specifics of employment. Various uncertainties made the transition from education to the labour market difficult. Career planning and achieving goals, also taking into account global processes, is a very complex task.

Changes in the education system and social and economic changes have significantly altered the conditions for starting an individual life. Nevertheless, the time spent in the education system has lengthened, leading to an inflation of qualifications that shifts differences upwards.

The absence of strong economic growth and the structural problems of vocational and higher education create a cycle that is hard to break: it is increasingly difficult to get a desirable job without higher qualifications and practical work experience, but having one does not automatically mean a secure path to a successful career. (Furlong, 2013 p. 74.)

Trends of youth employability and unemployment

The main available data sources on youth employment and NEET youth can be found in the general labour market data published by the Hungarian Central Statistical Office (Központi Statisztikai Hivatal).

Trends of youth employability and unemployment do not differ significantly from the regional trends: until the 2008 crisis, the youth unemployment rate was below the EU average, then it increased slightly until 2012. From 2012 onwards it 'improved at a rapid pace, approaching pre-crisis levels and falling below the EU average in 2014 (20.4% compared to 22.2% for the EU average) reaching16.7% in the third quarter of 2015'. The average share of NEET young people under 25 fell to 11% in 2016, below pre-crisis levels and the EU average (11.5%). The NEET rate remained unchanged in 2019 (11%) but slightly increased in 2020 (11.7%). Data available for 2019 show that the unemployment rate of Hungarian young people under the age of 25 dropped to about 11.4% (compared to the about 14.4% EU average) but it increased to 12.8% in 2020 but it's a general trend in the EU countries.

The employment rate of young people

The employment rate of young people in Hungary has been historically very low compared to the EU figures; the employment rate of the 15-29 year-olds [A 15–29 éves fiatalok foglalkoztatása (2004–2019)] rose above 40% in 2014 (increasing further to 47.1% in 2019), which is a return to the pre-crisis level in contrast to the lowest point of 34.8% in 2011. The employment rate of young people between the ages of 15 and 24 was 28.5% compared to the 35.7% EU average in 2019. The rate of those who are employed part-time is very low in the society as a whole and it is not different with young people, either. In 2019, 7.8% of 15-24 year-olds were employed part-time, which shows a reduction compared to the peak of 10.1% in 2011.

The employment possibilities of young people

The employment possibilities of young people have changed notably in the recent years. The significant recession between 2008 and 2010 and the slow recovery that followed made the transition from education to the labour market more difficult, which affected young people’s situation in the labour market more adversely than that of elder groups'.

Relatively low activity of students

It is also worth mentioning that the labour market is characterised by the relatively low activity of students, although the most recent official data (A fiatalok munkaerő-piaci helyzete) dates back to 2010. Based on the data of that labour market research, only 5% of the 15-29-year-old day students were employed, and only 20% of them worked in the previous year.

According to the most recent youth research [Hungarian Youth 2020 (Magyar Fiatalok 2020)], more than the half of young people aged 15-29 are active in the labour market. Also, more than half of active young people feel secure in their job.

Youth entrepreneurship

In 2013 the rate of self-employed young people was only 4% of the total employment. This is one of the lowest rates in the EU, and the ratio has even decreased both in relative terms (from 4.5 to 4.0 per cent) and in absolute terms (from 34.1 to 26.8 per 1 000 people) between 2008 and 2013. Although young people have positive attitudes towards self-employment and being an entrepreneur, the detailed analysis points out that for most young people being employed (especially in international companies) means the generally accepted positive vision for the future in the labour market.

The low level of risk-taking, the widespread fear of failure, the unpredictable economic situation (with the frequent changes in the tax system and government bureaucracy), the lack of effictive teaching on the skills/competencies required for entrepreneurship, and the predominantly negative opinions about business in society are all factors that contributes to these rates.

The current trend of more and more young people working in start-ups and the growing visibility offer the opportunity for attitudes and motivation to change in the long term. According to the most recent youth research [Hungarian Youth 2020 (Magyar Fiatalok 2020)], 19% of the 15-29-year-olds consider to become an entrepreneur in a few years.

Main concepts

 

The term 'youth' may refer to various age groups, depending on the context and the data examined. The National Youth Strategy 2009-2024 (Nemzeti Ifjúsági Stratégia 2009-2024) referred hereinafter to as NYS)] analyses the 15-29 age group based on the youth researches but in its indicators, it refers to the activity rate of the 15-34 age group. The Hungarian Central Statistical Office (Központi Statisztikai Hivatal) in its recent publications refers to both the 15-24 year-olds and the 25-29 year-olds as young while presenting employment, although the Office examines (Munkaerőpiaci helyzetkép, 2014-2018) these two age groups separately.

Recently, there is a special attention to the age group of 15-24 because of the spreading of the Youth Guarantee Programme, which also made the NEET acronym well known. It should be mentioned that – due to the nature of entrepreneurship, that requires more experience – the target group of the largest non-state organisation, the National Association of Young Entrepreneurs (FIVOSZ) is the 18-40 year-olds.

The priorities (prioritások) related to the support of small or medium-sized enterprises (referred hereinafter to as SMEs) define those enterprises 'young' where 'at least 51% of the shares are possessed by persons under the age of 35, and the executive is also a young person under the age of 35'.

The National Youth Strategy 2009-2024 (Nemzeti Ifjúsági Stratégia 2009-2024) indicators related to employment (and independent existence) of youth are the following:

 

  • the activity rate of 15–34 year-olds,
  • number of registered unemployed career starters,
  • the ratio of employees within the group of youth who are not students or pensioners,
  • the time period between the date of school-leaving and the first day of employment in youth groups with different qualifications,
  • the ratio of youth aged 15-29 living in households independent of their parents to those who aspire to live independently
  • the ratio of young entrepreneurs to all young people who are not students or pensioners.