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EACEA National Policies Platform: Youthwiki
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 caused by the end of communism had a serious effect on the specificities of employment. Several insecurities made the transition from education to the labour market hard. Career planning and reaching goals, taking into account the global processes as well, is a very complex task.

Changes in the education system and social and economic changes have significantly modified the conditions of starting an individual life. Nonetheless, time spent in the education system has increased, which has led to the inflation of qualifications shifting the differences upwards.

The lack of strong economic growth and the structural problems of vocational and higher education create a hardly dissolvable cycle: it is harder and harder to get a desirable job without higher qualification and the lack of practical working experience; however, possessing one does not automatically mean a safe path to a successful career. (Furlong, 2013 p. 74.)

Trends of youth employability and unemployment

The main sources of data available 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 crisis in 2008 youth unemployment rate was below the EU average, then it increased slightly until 2012. From 2012 onwards 'it improved at a rapid pace, approached the pre-crisis level and in 2014 it fell below the EU average (20.4% compared to the 22.2% of the EU average) dropping to 16.7% in the third quarter of 2015. The average proportion of NEET youth below 25 was reduced to 11% in 2016, which, is below the pre-crisis level and the EU average (11.5%). The NEET rate was the same (11%) in 2019. Data available for 2019 show that the unemployment rate of young people under the age of 25 dropped to about 11.4% (compared to the about 14.4% EU average).

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’.

Regarding the entrance to the labour market the data of the youth research carried out in 2012 (a 2012-es ifjúságkutatás) showed that 37% of young people did not receive external support while looking for a paid job, while every third young person was supported by his or her relatives.

Young people with different qualification levels were influenced differently by these tendencies, naturally. The employment of young people with lower qualifications is well below the EU average (9.1% of those 15-24 year-olds in 2019 who belong to ISCED 0-2 group in comparison with the EU28 average of 19.5%), while there is no significant difference between those who have a higher level of education.

The low qualified young people who lag behind struggle very often with multiple disadvantages:

  • bad education conditions,
  • living in hardly reachable or deprived areas and
  • often belonging to minority groups. (Furlong, 2013 p. 82.; Scarpetta et al., 2010 p. 19.)

The precarious labour market situation (foglalkoztatási helyzet) is often accompanied by the transfer of economic inactivity and social marginalisation among generations. In comparison, among those 20-34 year-olds who have just finished their studies (those who have completed at least secondary education) the employment rate is better than the EU average.

NEET rate

The rate of the 15-24 year-old young people, who are not in education, employment or training (NEET), has been decreasing since peaking in 2013 at 15.5%. The NEET rate was 11.5% in 2015, which was approximately in line with the EU average, and in 2019 it was above the EU average (11% compared to the 10.1% EU average).

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.

However, according to the most recent youth research (a 2016-os ifjúságkutatás), 24% of students aged 15-29 have been employed.

According to the data of the youth research in 2012 (a 2012-es ifjúságkutatás), only 36% of university and college students had any working experience at all. The research results also showed that those who have experience in the labour market could find a job faster after receiving their degree.

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 from failures, the unpredictable economic situation (with the frequent changes in the tax system and with the state bureaucracy), the lack of efficient teaching about the skills/competencies required for being an entrepreneur, and the predominantly negative opinions about companies in the society are all factors contributing to these rates.

The current trend that more and more young people work in start-ups and the growing visibility provide the opportunity for changes in attitudes and motivation in the long term. However, the 2016 youth research (a 2016-os ifjúságkutatás) shows that only 4% of the working youth (15-29) works as an entrepreneur, and the rate is not much higher in the sub-group of 24-29 years old youth either (5%).

 

Main concepts

 

The term 'youth' may refer to various age groups, depending on the context and the data examined. The National Youth Strategy [(Nemzeti Ifjúsági Stratégia) 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 these two age groups separately.

Recently, there is a special attention to the age group of 15-24 year-olds because of the spreading of the Youth Guarantee Programme, which made the NEET acronym well known, too. It should be mentioned that – due to the nature of entrepreneurship, that requires more experience – the target group of the largest non-state organisation, FIVOSZ – Young Entrepreneurs Association Hungary (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 (Nemzeti Ifjúsági Stratégia) indicators related to employment (and independent existence) of youth are the following:

 

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