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EACEA National Policies Platform


3. Employment & Entrepreneurship

3.6 Integration of young people in the labour market

Last update: 1 April 2024
On this page
  1. Youth employment measures
  2. Flexicurity measures focusing on young people
  3. Reconciliation of private and working life for young people
  4. Funding of existing schemes/initiatives
  5. Quality assurance

Youth employment measures

Most youth employment measures are part of the Youth Guarantee (referred hereinafter to as YG) system.

Youth Guarantee Active Labour Market Programme

The backbone of the system is the Youth Guarantee Active Labour Market Programme. The National Employment Service (Nemzeti Foglalkoztatási Szolgálat) which implements the guarantee, coordinates the system under this programme. This includes addressing, registration and monitoring of young people and the tasks relating to maintaining contact with the partner organisations involved in the operation of the system. The programme aims to promote the entry of young people under 25 into the labour market by providing wage subsidies, entrepreneurship support and training linked to labour market services such as job search assistance or mentoring. (For more information on the YG system, see sub-chapter 3.2)

Youth Entrepreneurship Support Programs

The aim of the Youth Entrepreneurship Support projects is to provide support to young entrepreneurs (between the age of 18 and 30 and above 30 years) in the disadvantaged regions of Hungary. In the frame of the projects, the applicants can receive professional support to create their business plan, to acquire the skills to start their business and also they get financial support. It was an EU funded project and had a budget of HUF 39.5 billion (about EUR 101 million). The project planned to be finished in January 2023 but there is no update available on it.

The organisations participating in the Youth Guarantee

The organisations implementing the programme are: 

Under the programme, the organisations provide young people with training to acquire the necessary skills and knowledge to become entrepreneurs and run a business. They can also receive support in creating a business plan, advice and mentoring.

Tax exemption for below 25-year-olds

In 2021, one main youth related provision was the personal income tax exemption under 25 years from January 2022. The initiative comes from the Operative Council responsible for community revitalisation in Hungary and will cost HUF 130-150 billion (about EUR 333-384 million) annually. In 2022, young people under the age of 25, could save a maximum of HUF 65 055 (about EUR 166) per month and up to HUF 780 660 (about EUR 2 000) in the entire tax year through this measure.

Direct job-creation programme

Direct job creation outside the Youth Guarantee Programme is not related strictly to youth employment. The role of the Public Work Scheme should be mentioned: the long-term unemployed must work in the secondary labour market in order to get a (lower than minimum wage) salary and the possibility to get state subsidies. Although the explicit aim of the scheme is to help workers return to the primary labour market, young people are not its specific target group, mostly because of the opportunities offered by the YG Programme.

Wage and recruitment subsidies aiming at fostering youth employment in the private sector

The 'Support of the entreprises' employement' ('Vállalkozások munkaerő támogatása') was a governmental initiative to provide non-refundable support to workplaces which employ registered job seekers under 25 or who has been registered as a job seeker at least for a month. The employer was able to receive this support for 6 months for reducing the social contribution tax (paid by the employer). The support was available until the end of 2022.

Special target groups 

Employment measures under the YG Programme are specifically targeted at NEET young people, but instead of focusing on low-skilled and long-term unemployed youth, support depends on individual needs:

'With regard to the heterogeneity of the target group, the content of support is differentiated according to individual needs. The package of measure(s) and service(s) offered to the young person is based on an individual action plan, drawn up by a member of the YG mentor-network in cooperation with the client, comprising the responsibilities of the client as well.' (Hungary's National Youth Guarantee Implementation Plan)

The special target groups of the Youth Guarantee Plus, published in 2023, are young people who

  • have a low level of education, 
  • live in a rural area, 
  • are raising small children,
  • are Roma, 
  • are job seekers starting their careers,
  • have a preserved work capacity,
  • carry out caring activities.

A key document regarding employment of Roma people is the National Social Inclusion Strategy 2030 (Magyar Nemzeti Társadalmi Felzárkózási Stratégia 2030). The Strategy states that the employment possibilities of Roma youth is worse because they have lower levels of education and the rate of early school leavers is higher among them. In 2019, the rate of unemployed Roma youth (30.5%) and other young people (10.4%) among 15-24 year olds showed wide disparities. (For more information on the National Social Inclusion Strategy, see sub-chapter 4.3 Strategy for the social inclusion of young people)

Flexicurity measures focusing on young people

National Youth Strategy

The aim of youth flexible employment appears in the National Youth Strategy 2009-2024 [Nemzeti Ifjúsági Stratégia 2009-2024 (referred hereinafter to as NYS)]:

'Reduced or flexible working time may be a means of enhancing labour market integration. To achieve this, both the employer and the employee should be motivated. A special programme must be designed to help the reintegration of young people who have been excluded from the labour market by retraining and through the establishment of a new type of motivation system (both on the employer’s and the employee’s side).' (National Youth Strategy 2009-2024)

The related partial objective is the following:

'To encourage the employment of youth in part-time and atypical forms of employment and to increase the motivation of employers for hiring career starters.' (National Youth Strategy 2009-2024)

Labour Code

More general measures can also be found in the Labour Code (Munka Törvénykönyve).

'The main feature of the Code is the loosening of provisions and thereby, the creation of external flexibility for employers. Dismissal protection has been traditionally at a very low level, and sanctions for the unlawful termination of employment have been further limited. The Labour Code emphasises the importance of individual employment contracts and collective agreements by increasing individual and collective autonomy.

[…] Internal flexibility has also been increased. The working time regulation is as flexible as possible within the frame of the EU Working Time Directive, using this rather as a ceiling instead of a minimum level. The regulation provides employers with great flexibility, for example with the possibility of using 300 hours of overtime a year and cutting overtime costs when there is a sudden surge in labour force demand.' (Risak-Kovács, 2017)

Reconciliation of private and working life for young people

Within the specific objectives of NYS, the priority of reconciling work and family life appears alongside the promotion of starting a family and raising children. The Strategy states that,

'We need labour market regulators that facilitate the compatibility of family life and work and make atypical employment possible for families having children, especially in a certain life stage of parents with small children. Special attention should be paid to ensuring life path and carrier planning opportunities for women having children.' (National Youth Strategy 2009-2024)

The action plan of NYS for 2016-2017 aims also

'to support employment forms that help reconcile work and private life through promoting flexible employment and the reduction of employer contributions for employees with children, employed part-time.' (Hungary's National Youth Guarantee Implementation Plan)

Funding of existing schemes/initiatives

Programmes within the Youth Guarantee system are all European Social Fund co-funded, with the national budget funding added. In addition, the budget of the Youth Guarantee Active Labour Market Programme includes all funds available to Hungary under the Youth Employment Initiative. Until 2020, a total of about HUF 200 billion (about EUR 512 million) was available to finance the guarantee.

Quality assurance

All ESF co-funded programmes under the YG system are monitored closely by the Ministry for National Economy (Nemzetgazdasági Minisztérium) in line with EU requirements. Regular audits are carried out by the Directorate General for Audit of European the Fund, the European Commission and the European Court of Auditors.