Conference on Productivity, Investment in Human Capital and the Challenge of

Youth Employment

Bergamo (Italy) 13-18 December 2010

Youth Employment in HungaryAn Empirical Study of the Hungarian Situation

Balazs RossuAssistant Research FellowUniversity of Szeged (Hungary)

Employment Related Problems

Number of registered unemployed in January 2009: 509.907

in August 2010: 546,094

Peak reached: January 2010: more than 650.000

Source in the PastA Trend Born

Major change in the patterns of work and learning:

1989 (Regime change):

2004:

Number of people employed:

Number of people employed:

Number of students in higher education:

Number of students in higher education:

5.2015 million

100,868

3.9916 million

378,466

- Outdated thinking by most of society:

- Education = Well paying jobs

- Vocational qualification Lower salary- ”Prestigeous” professions are oversupplied Intense need for professional (manual) workers- Inaccurate vision of the labour market and future salaries;

- Low level of mobility;

Basic Problems (Background Philosophy):

Labour Market Possibilities

- Teachers: In 2004 it was in sync, later there became an oversupply- Computer studies: In sync (no accurate data regarding the private sector)

Ratio of the employed and the ones aiming to be (among registered unemployed):

- Engineering: 2.5 times more registerd etrants, than those

currently employed (no data on specialised)

- Health care: according to the registered unemployed, not too many aim to work in this sector

Youth Perspective

- Results of studies (in an inverse proportion)- Knowledge of languages (most commonly English)

Factors influencing the expectation of a higher salary:

- Education of parents (the lower, the lower wage accepted)- Internet connection at home (higher if positive)

- The institution or faculty and the chosen profession itself

- Gaining work experience during school years

Factors influencing the expected amount of time to pass before employment:

- Education of parents (affects in reverse the lower, the less time is expected to pass)

- The institution or faculty and the chosen profession itself

- Knowledge of languages (most commonly English) (reversed effect)

Effective Support Programs

- Effectively helps entrants to be employed for at least

two (or one for graduates) years (full-time)- ”Compensates” the employers for the entrants’ lack of field experience by considerable allowances - Instead of 27% (of the gross wage) as employers’ contribution and social insurance contribution, the employer only has to pay 10% during the first year, (or first 9 months for graduates) and 20% during the second year (or the last three months for graduates)

The START-Card:

Main advantages:

- regular employment-like conditions;- actual wage-like grants;- participants are insured (in aspect of social security);- can be combined with the Start Card Scheme;- tax reduction;- preferential contributions;- the participant is provided a letter of recommendation certifying the work experience

The Paid Internship Employment

Other Possibilities:- Organization of job fairs and open days by various institutions

- Operation of informational services and consultation offices (e.g. In schools) by Employment Centres

- Support of simple needs, e.g. reimbursement of travelling expenses to promote mobility and widen the range of possibilities for the individual

Conclusion- Necessary information do not get to people;- Families and society influences the younger generation based on false or absolete conceptions and values;- There is not enough focus on practical and manual training in education;- Supply and demand do not match on the labour market;- Flaws of the current system should be mended;- Thinking in general should be modernized

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