Discussion Papers 2005. No. 47.
Long-term Unemployment and Its Alleviation in Rural Areas
CENTRE FOR REGIONAL STUDIES
OF HUNGARIAN ACADEMY OF SCIENCES
DISCUSSION PAPERS
No. 47
Long-term Unemployment and Its
Alleviation in Rural Areas
– Case of Hungary –
by
Éva G. Fekete
(research team leader)
Series editor
Zoltán GÁL
Pécs
2005
Discussion Papers 2005. No. 47.
Long-term Unemployment and Its Alleviation in Rural Areas
ISSN 0238–2008
ISBN 963 9052 54 X
2005 by Centre for Regional Studies of the Hungarian Academy of Sciences.
Technical editor: Ilona Csapó.
Printed in Hungary by Sümegi Nyomdaipari, Kereskedelmi és Szolgáltató
Ltd., Pécs.
2
Discussion Papers 2005. No. 47.
Long-term Unemployment and Its Alleviation in Rural Areas
CONTENTS
Introduction .......................................................................................................................... 5
1 General factors determining economical situation of Hungarian rural areas
in the 1990s..................................................................................................................... 6
2 General and regional characteristics of long-term unemployment ............................... 10
2.1 Concept, interpretation, social and economic effects of long-term
unemployment ...................................................................................................... 10
Törölt: The p
2.2. Long-term unemployment in Hungary and the trends of its changes .................... 12
2.2.1 Changes in the number and proportion of the unemployed ........................ 12
2.2.2 Changes in the number and rate of long-term unemployed people ............ 13
2.2.3 Composition of long-term unemployed people .......................................... 20
2.3 Relationship between long-term unemployment and other regional
characteristics ........................................................................................................ 26
3 Foreign methods and experience in alleviating long-term unemployment .................... 30
3.1 Typical models ...................................................................................................... 30
3.2 Typical techniques ................................................................................................. 33
3.3 Employment objectives of the European Union .................................................... 37
4 Hungarian experience in alleviating long-term unemployment..................................... 38
4.1 Individual strategies of long-term unemployed people.......................................... 38
4.2 Government programmes ...................................................................................... 40
4.2.1 Labour Market Fund................................................................................... 41
4.2.2 Programmes of the National Employment Public Fund (OFA).................. 45
4.2.3 Supporting social land programmes ........................................................... 55
4.2.4 The effect of employment programmes...................................................... 57
4.2.5 Problems of approach ................................................................................. 58
4.3 Initiatives of local employment ............................................................................. 61
5 A proposal for the development of strategies to alleviate long-term unemployment .... 64
5.1 A new approach to the objectives and priorities of employment policy ................ 64
5.2 Changes of content in the trends of the practice and programmes of
financial support ..................................................................................................... 67
5.3 Strengthening local employment initiatives........................................................... 70
6 Summary – the main statements of the research............................................................ 72
6.1 General and regional characteristics of long-term unemployment ........................ 72
6.2 Foreign methods and experience in alleviating long-term unemployment ............ 73
6.3 Experience in alleviating long-term unemployment in Hungary ........................... 73
6.4 Proposals for developing strategies to alleviate long-term unemployment ........... 76
References .......................................................................................................................... 78
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Discussion Papers 2005. No. 47.
Long-term Unemployment and Its Alleviation in Rural Areas
List of figures
Figure 1
The total number of inactive and dependant persons per one hundred
employees ....................................................................................................... 10
Figure 2
Changes in the number of the unemployed and in the number
of long-term unemployed (1993–2000) ........................................................... 14
Figure 3
Proportion of registered unemployed within the active age population ............ 15
Figure 4
Proportion of long-term unemployed (over 180 days) within all
registered unemployed .................................................................................... 17
Figure 5
Proportion of women within the long-term unemployed (over 180 days) ...... 23
Figure 6
Proportion of the unskilled within all registered unemployed ........................ 26
List of tables
Table 1
Changes in the unemployment rate in the 1990s (January data) ...................... 13
Table 2
Division of the unemployed according to the length of time spent
seeking employment ........................................................................................ 16
Table 3
The primary reason for the unemployed seeking new jobs (figures
expressed in percentage) .................................................................................. 18
Table 4
The rate of first entrants not at the beginning of their career and that of
those who are not first entrants but are entitled to some kind of benefit
compared to all entrants (monthly average – %).............................................. 19
Table 5
Distribution of the unemployed among towns and villages of different
size and legal status (1994, 1998) .................................................................... 21
Table 6
Distribution of sexes among the unemployed according to the legal
status and size of towns and villages (1994–1998) .......................................... 19
Table 7
Distribution of the unemployed according to the level of education in
towns and villages with different legal status and size – 1994, 1998............... 25
Table 8
Micro-regions with the highest rate of unemployment .................................... 28
Table 9
Sums spent on NEF (OFA) programmes in 1998–1999 .................................. 47
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Introduction
The main purposes of the academic research – commissioned by the Rural Devel-
opment Department of the Ministry of Agriculture and Rural Development – were
to examine the interrelation between long-term unemployment and individual as
well as family life strategies, the regional characteristics of the labour market and
the territorial development of rural areas, as well as explore governmental and local
ambitions to alleviate long-term unemployment and evaluate their efficiency.
The basic issues of the research were as follows:
1) Which are the regions where the concentrations of long-term unemployment
can be found and what are the reasons for it?
2) What kind of interrelation can be observed between long-term
unemployment and the potential of the social and economic development of
the regions?
3) What central and local attempts have there been to alleviate long-term
unemployment?
4) What results did these initiatives have and what were the reasons for their
success or failure?
5) What foreign models can be followed when trying to alleviate long-term
unemployment?
6) Which are the economic sectors, in which employment of those long-term
unemployed is the most possible?
The research was carried out by the horizontal work-team of rural development
of the Centre for Studies Research of the Hungarian Academy of Sciences.
The following tasks were completed by the members of research team: Balcsók,
István (annotation of most important pieces of bibliography, case study on
“Szatmár”); G. Fekete, Éva (summary of international experiences and best
practices, models for solution); Kovács, Teréz (case study on “Zselic”); Magyar,
Tünde (case study on “Ormánság”); Mezı, Barna (annotation of most important
pieces of bibliography, summary of results of former researches); Némethi,
Szabolcs (case study on “Cserehát”); Nemoda, István (summary of recent programs
of National Foundation of Employment); Szarvák, Tibor (summary of results of
former researches); survey of 900 people (600 unemployed and 300 employed) in 3
regions, case study on “Közép-Tisza-vidék”); Sziráki, Zsuzsa (bibliography);
Velkey, Gábor (theoretical background, summary and synthesis of results of former
researches); Vojtovics, Gábor (summary of recent governmental programs).
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
1
General factors determining economical situation
of Hungarian rural areas in the 1990s
The 1990s proved to be a vigorous decade in Hungary’s history. The irrevocably
“intruding” globalisation, Central-Eastern European processes caused by the
disintegration of the communist block, national events of the change of regime,
then the requirements for accession to the European Union together formed the
changes of this period.
Hungary stepped to the line of transformation with a heavy heritage. The big-
gest part of the economy was characterized by out-of-date machinery, thus the
economy had a non-competitive structure. Hidden unemployment was endemic.
There was a general lack of modern corporate organizational-structural systems
and up-to-date knowledge of corporate management and marketing. It lost its big-
gest markets because of the COMECON’s collapse. Forty years were left out of the
operation of democratic institutions, generations grew up under one-sided ideologi-
cal pressure, socialized to dependant role aligned to the system of society of self-
governance blocking and control from above. Tensions, decades-old grievances
strained among towns and their countryside, because of forced development of
centres designated by the district-making policy of the 70s on one hand, and set-
tlements that lost their autonomy on the other hand.
Economic globalisation swept over the country. The political change of regime
removed every obstacle that hindered the influx of foreign capital to the country
with – by the way – open-economy. Moreover, governments definitely supported
the country’s adhesion to the globalised world economy. During the privatisation,
which was intended to dismantle the state ownership dominant in the former eco-
nomic structure, the country’s most important factories fell into foreign hands.
Foreign investors played an outstanding part in the process of the economic re-
structuring. This is characterized well by the fact that in Hungary the total sum of
foreign direct investment, which stemmed from privatisation and green-field in-
vestment reached 19 billion (19,000 million) USD by the end of 1997. (Revenue
from privatisation meant 47.7% of the foreign capital influx.) In accordance with
the traditions of Hungarian economic history, the ratio of German participation
became the highest in Hungarian investments, though at the same time French and
American investors played an ever increasing role in Hungarian privatisation.
(Csáki–Macher, 1978).
Foreign influence became over-dominant especially in the food industry (sugar,
oil and dairy industry), which affected sensitively the rural economy, and in the
energy industry.
Big (food) retail networks were sold even in the earliest stage of privatisation,
which – together with the establishment of big hypermarkets – made national agri-
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
cultural producers vulnerable, contributed to the acceleration of the already signifi-
cant inflation and the exacerbation of social problems. Due to the constant increase
in production costs and the total lack of the protection of national food market un-
fortunately nowadays the village dwellers satisfy their need of vegetables, meat and
dairy products in multinational hypermarkets.
The accomplishment of cultural globalisation was brought by the increased
number of journeys, the rapid spread of communication instruments (though it still
lags far behind developed countries) and particularly the appearance of commercial
TV broad casting corporations and the major part of the media caught by foreign
proprietors. Even in the smallest village the same material and intellectual products
are available just like in bigger towns. The world opened, at the same time a part of
it got lost. Those who lived in villages could face sharply the closed way of their
own community, the poorness of opportunities offered by their living place through
and due to the values strengthened by the media. At the same time opportunity
arouse that the more remote areas could be known and their conditions measured
by “postmodern” set of values could be recognized as utilisable economic re-
sources.
Transition to market economy demanded the dismantling of state proprietorship,
the strengthening of private enterprises and the construction of market institutions.
Nevertheless, privatisation was the most determinant economic process of this
period. During a uniquely short period – eight years – the entrepreneurial assets of
the state decreased to the 20% of the total assets of the entrepreneurial sphere. It
can be measured as positive that the former state property – in face of the Czech
experiences – got into the hands of real owners (Macher, 1997). The dwellers of
rural areas engaged in the privatisation mostly by the compensation and the reor-
ganization of former agricultural co-operatives.
The compensation started as the historical delivery of justice for the aggrieved
of the communist system, thus the former owners damaged by the collectivisation
of agriculture, the persecuted for political reasons and the prisoners of war. Al-
though, the struggle of political groups and persons competing with each other
made it obscure, complicated, bureaucratic and finally none of the groups intended
to be compensated could be managed to satisfy with this measure consuming 500
billion forints. Just the opposite: “compensation became a particular kind of delu-
sion. It looked different than it was. As many social groups, they saw the process
and made it look in as many ways” (Mihályi, 1998. 165. p.). Compensation – in
opposition with every other intention – served basically the enrichment of the am-
bitious entrepreneurial group, and for the least part the interests of the village and
the peasants. As two-thirds of former land-tillers’ inheritors are town dwellers, the
most significant resource of the countryside, land, forests, agricultural buildings
and instruments formerly owned by co-operations fell in outer hands.
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
In the period of the change of regime the elimination of co-operative property in
the agriculture came forward as the pivotal question of politics. Co-operatives had
to hand over 40% of their land for compensational reasons. The privatization of the
other part of co-operative assets started with the denomination of land, movable
and immovable property and the definition of ratios of share. Throughout the
country the active members of co-operatives received property notes worth 40% of
the 260 billion forint-co-operative-property equivalent to 15% of the entire national
property, the retired and the outer proprietors got 40% and 20% respectively. Those
who obtained shares in this way could announce their retirement until the end of
1992, and could take property out of the co-operative. 10% of co-operative assets
were privatized in this way. During the transition the number of co-operatives did
not decrease, but between 1988 and 1993 it increased by 30%. It is true that at the
same time the size of the land cultivated by them diminished by 30% (Hamar,
1999).
Reorganized co-operatives continued farming in land on lease, which increased
costs significantly and deteriorated their competitiveness. Moreover, the recon-
struction of proprietorship in agriculture coincided with the radical reduction of
agricultural subsidies and export benefits. Costs of agricultural production grew
steeply. (For example, the price of diesel oil increased threefold.) Guarantees were
denied by the state and the land market was frozen for protecting the value of com-
pensation notes, there was a lack of mortgage, thus banks did not grant credit. For
the lack of credit the operation of agricultural firms became impossible, and they
went bankrupt en masse. In 1993 the management of co-operatives collapsed in
effect, and it coincided with the abolition of the law that obliged them to employ
their members. During six months 300 thousand people left co-operatives and for-
mer members could not take their shares out of the co-operatives. They could just
sell them like the retired did, who consumed them in a short time. According to
estimates, property worth 10 billion got out of agriculture in this way (Harcsa–
Kovács–Szelényi, 1994).
By 1992, gross agricultural production fell to 62% of the level of 1988 because
of the 20% fall of domestic demand and the sharp decrease in the number of agri-
cultural firms. In 1992 and 1993, 10% of arable land remained uncultivated. The
profitability of the branch kept falling due to food prices, which could not keep
with high inflation. While in the other branches of national economy the GDP grew
almost threefold by 1996 since 1990, the growth in agriculture was hardly one and
a half times as great. According to data, decollectivisation did more harm in pro-
duction than collectivization in the turn of the 1960s (Harcsa–Kovách–Szelényi,
1994).
In this economic situation, no investment was made in the agricultural sector,
which otherwise badly needed modernization. The some 750 thousand new land-
owners are not capable to be good owners, users of their land without machines,
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
capital, professional knowledge and market connections, utilize it with a loss and
low efficiency or lease it. The basic condition of household farming, which earlier
was done besides work and played a key role in modernizing Hungarian villages
was the integrator, who provided market connections and organized the division of
labour between big plants and small producers, disappeared with the disintegration
of co-operatives. 700 thousand small producers (with 1–3 ha) were left alone, even
their hope for integrating to commodity production was eliminated. Agricultural
employment declined from 1088 thousand people in 1988 to 250 thousand in 1993
(Harcsa–Kovách–Szelényi, 1994).
The liquidation of co-operatives brought with itself not only the transformation of
proprietorship and the former production structure, but the disintegration of supply
systems in the villages. Communal, social, cultural and community services oper-
ated earlier by co-operatives dissolved or their maintenance meant a burden for
local governments (which frequently exceeded their power). Even together with
these, agriculture remained a significant branch of economy in the countryside.
In the transformation of economic structure, besides the straightforward decline
in the role of agriculture, the dynamising force of rural economy definitively
proved to be the industry. Strong connection was indicated between the change in
rural GDP and industrial output (Kiss, 1998). However, in terms of employment
the dominancy of services grew. According to the number and ratio of jobs in ser-
vices the settlement slope can be drawn sharply. Tourism became one of the coun-
try’s most dynamic branches, though time by time exaggerated expectations were
defined for the branch. In the 90s in micro villages, the number and ratio of touris-
tic enterprises, besides agricultural ones, increased. Commuting possibilities tight-
ened in the 90s. Despite this, 40–60% of employees of rural settlements got a job in
another settlement. In the fact that how many rural inhabitants or what ratio of
them commute to the workplaces of other settlements, the accessibility of the vil-
lage has a relatively small role. The extent of economic power a town has is more
crucial than the closeness of that town (Kovács, 2003). Commuting between small
villages is also frequent, which is indicated by the fact that 25–40% of local jobs
are occupied by dwellers of other settlements.
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
2
General and regional characteristics of long-term
unemployment
2.1 Concept, interpretation, social and economic effects of long-term
unemployment
Working age inhabitants who have been looking for a job and have not found one
for at least a year are called long-term unemployed. It may be disputable, however,
who can really be regarded as long-term unemployed. Statistical surveys do not
always work with the same definitions. Sometimes those unemployed for more
than 180 days, sometimes those for at least a year are considered to be long-term
unemployed (Figure 1).
Figure 1
The total number of inactive and dependant persons per one hundred employees
Source: Census of 2001, Hungarian Central Statistical Office.
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
According to the interpretation and the definition of the OMMK (National Cen-
tre for Employment and Methodology, at present: Employment Office) a person is
long-term unemployed if he or she is over 18, and has been registered by the job
centre for at least a year, and during this period of time he or she has met the obli-
gation to co-operate, and has not been granted any kind of non-financial support for
a year, or all the interruptions and the duration of active supports have not ex-
ceeded the total of 31 days. The employment act only defines the criteria of unem-
ployment, one item of which is registration. However, many people are not in-
cluded in the long run, and they are left unaided with their problem, almost without
any social control (passive unemployed).
The concept of long-term unemployment does not only mean quantity, but
unlike temporary unemployment it implies potential social danger, and has a num-
ber of negative effects on society. The fact that those ousted from the labour market
are likely to face such a situation permanently will result in very severe social con-
flicts. One of its dangerous consequences is poverty. From a financial point of
view, the lack of income followed by complete poverty will become the major
problem. Unemployment benefits and supplementary unemployment benefits are
not enough for families to make both ends meet, although they are forced to do so.
Meanwhile, those having lost their jobs will live in increasingly difficult social
conditions, and potential employers will gradually become averse towards them, so
the whole process will end up in passive unemployment, as having given up all
hope, people will find it senseless to keep looking for new jobs (Füzessy, 1995). In
this way those concerned will both get into very hard financial conditions and by
being completely excluded from society, will suffer considerable moral harm. Be-
sides, serious social-psychological dangers, such as isolation, loss of social prestige
and self-esteem, conflicts in the family, health problems, or even the danger of
suicide may threaten such people (Walkené, 1997). In towns and villages afflicted
by this problem, uncontrollable and long-term unemployment of masses has led to
new phenomena like the appearance of beggars in the streets, the impoverishment
of the middle layers of village society, using up reserves and an increase in the
number of divorces and alcoholics. The young, well-educated and venturesome
part of inhabitants migrate from these villages whereas older, less educated, unam-
bitious layers tend to stay there (Laki, 1996). Long-term unemployment devaluates
human capital, which in itself will harm the chances of finding jobs. Long-term
unemployment starts a vicious circle which, besides individual and family trage-
dies, causes the decline of certain regions as well as goes with the accumulation of
social and economic problems.
The attempts to find a solution can basically be either correction or prevention.
Correction-oriented solutions try to handle the situation after losing a job, while
prevention focuses on the situation before losing it. In our opinion unemployment
could be prevented to a greater degree by joining social forces, by a more co-ordi-
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
nated activity of the bodies of government, employers and employees, by the mod-
ernization of the system of vocational training and other measures (Walkené,
1997).
The organizational system of institutions of employment policy is capable of
adjusting to the given conditions, even to the regional unevenness of the labour
market, but its major task is to control situations and solve consequences. The par-
tial solution of the accumulated tensions and the increasing poverty can still be
successful by the efforts of social policy but in the long run, it is only the develop-
ment of the economy of regions that can lead to real solutions, which is a part of
regional development and not that of employment policy. Current local difficulties
of individual areas can be overcome with different means of regional development
policy after a thorough examination of local causes. Employment policy, social
policy can only provide efficient help in co-operation with regional development
(Fazekas, 1996).
2.2 Long-term unemployment in Hungary and the trends
of its changes
2.2.1 Changes in the number and proportion of the unemployed
It was in the mid-80s that open unemployment appeared in Hungary and it was at
that time that various reform programmes were started to modernize the economy.
At the beginning unemployment was regarded as a natural consequence of these
programmes, as a concomitant phenomenon of the change of economic system.
With unemployment spreading, a registration system of the unemployed had to
be introduced so since 1987 it has been possible to follow the changes in the num-
ber of the unemployed. At that time the number of unemployed people registered
with job centres showed a slow increase but the statistical figures were by no
means all-embracing, which was the result of the fact that only a part of those
seeking jobs registered for those organizations, so there was a big difference be-
tween the number of registered and actually unemployed people. According to the
national census in 1990 there were 95,000 unemployed people, which meant 1.8 %
of all active employed, in registrations, however, there were much fewer, only
24,000 of them.
The increase in the number of the registered unemployed was dramatic in the
first years of the 1990s. A considerable part of the unemployed was made redun-
dant due to economic reasons mainly because the factory or the company they had
been working for had closed down, and not through fault of their own. The other
part, however, lost their jobs for quite different reasons. While at the beginning of
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
1991 100,000 unemployed people were registered and the unemployment rate in
January was 2.1%, in December 1992 663,000 people were registered and the un-
employment rate reached 12.3%. It was in February 1993 that the number of reg-
istered unemployed people reached the peak of 705,000, with an unemployment
rate of 13.6%. This can mostly be explained with the decline of the economy, but
the fact that the unemployed became interested in being registered started to play
an important part. (According to the Employment Act [1991. IV], the unemployed
were granted some kind of unemployment benefit if they were registered with a job
centre after January 1991 – Table 1.)
Table 1
Changes in the unemployment rate in the 1990s (January data)
Year
Unemployment rate %
Year
Unemployment rate %
1991
2.0
1996
11.7
1992
8.2
1997
11.4
1993
13.9
1998
11.0
1994
14.0
1999
7.0
1995
12.0
2000
6.4
Source: Employment Office, 2001.
After a period of fast growth unemployment reached the peak very quickly, and
it was induced by the sudden loss of Eastern-European markets and the transition
into market economy.
After the peak there were only few people who became unemployed, but there
were also just a few who could be employed again. (Figure 2–3.)
2.2.2 Changes in the number and rate of long-term unemployed people
The number of those long-term unemployed published in official statistics also
reached its peak in 1993, but unlike the above mentioned unemployment figures it
was only in the third quarter of the year. After it a slow decrease started, which
became an apparent stagnation in 1996. It was apparent because owing to the lack
of data collection the description of actual long-term unemployment with real data
is only possible in an indirect way. (It is true both to the regular surveys of labour
force carried out by the KSH [Central Office of Statistics] and the figures of job
centres.) Statistics of long-term unemployment are distorted by the following fac-
tors:
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Figure 2
Changes in the number of the unemployed and in the number
of long-term unemployed (1993–2000)
people
800 000
700 000
600 000
500 000
400 000
300 000
200 000
100 000
0
1993
1994
1995
1996
1997
1998
1999
2000
registered unemployed
long-term unemployed
Source: VÁTI OVO, 2001.
1) Statistics do not include those who are not in touch with job centres because
attempts to find a job have been unsuccessful for a long time so they have decided
to give up co-operation with the job centre.
From the appearance of unemployment in Hungary till 1995–96 the period of
trying to find a job was continuously increasing. After 1996 the figures do not
show significant changes, the then characteristics seemed to become stable. Taking
the changes in the unemployment provision (i.e. in the duration and sum of the un-
employment benefit) into consideration, the declining indicators of the first 4–5
years, then their stagnation means that at least 30% of the registered unemployed
basically resigned themselves to the extremely low benefit (i.e. the regular social
benefit of working age people). The sum of this kind of benefit is determined by
the local government on the basis of social background and it is granted after the
termination of the unemployment benefit and that of the subsequent supplementary
unemployment benefit, the amount of which is also determined on the basis of
social situation. It is granted only if the unemployed person is willing to co-operate
with the job centre. These figures, however, do not include the unemployed who,
due to their social background (because of the per capita income of the family)
have not been granted a supplementary unemployment benefit or social benefit, as
continuous co-operation with the job centre could be important for these people
14
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
only because of the placement service they provide, which has not been successful
in the long run either. (International experience suggests that only 15–30% of all
unemployed with a new job could find one on the primary labour market in the
competitive sector as a result of the placement activity of a job centre.) (Table 2.)
2) Escape into inactive status has become a general phenomenon.
The proportion of the economically active population with the age group of 15-
75 showed a dramatic decrease after 1990, and it was typical of the whole country
until 1995–96. After 1996 this trend changed, there was a slight increase in the
proportion of the economically active population or at least it did not decline any
more in the more developed regions, where the first signs of economic growth ap-
peared earlier, and the rate of decrease of previous years had also been slower. In
more backward areas of the country, the decline before 1996 was more dramatic,
which began to stagnate after 1996 (Baranya, Hajdú-Bihar, Heves, Jász-Nagykun-
Szolnok, Nógrád, Somogy counties).
Figure 3
Proportion of registered unemployed within the active age population
Source: T-STAR database, 2000, Hungarian Central Statistical Office.
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G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Table 2
Division of the unemployed according to the length of time spent
seeking employment, %
Year
<1
1–6
7–12
13–18
19–24
>24
Total
1992
10
43
28
10
9
–
100
1993
7
33
27
15
17
–
100
1994
7
28
23
15
17
9
100
1995
6
27
22
14
8
23
100
1996
5
25
21
14
10
26
100
1997
5
27
21
14
9
24
100
1998
4
30
21
13
9
22
100
1999
5
29
21
13
9
22
100
Source: KSH. Time Figures of the Survey of Labour Force 1992–1999.
The counties in the worst economic situation showed the most dramatic
decrease before 1996, and it continued worsening after 1996, too, though at a
considerably slower rate (Békés, Borsod-Abaúj-Zemplén, Szabolcs-Szatmár-Bereg
counties). (We have to emphasize the fact that the demographic indicators of the
population do not account for changes of such scale.) The considerable differences
between the ratios of the individual counties seem to be in close correlation with
the rate of decrease, i.e. in the counties with a worse rate of employment, a
considerably higher number of people become inactive and choose other forms of
provision (Figure 4).
The signs of the lack of long-term unemployment refer to continuously and un-
ambiguously increasing trends. Such signs are:
3) One of the primary reasons why the unemployed were seeking new jobs was
the ceasing inactive or dependant status. It had been increasing and had come close
to as high as 10% by 1999. The escape strategy mentioned above was also often
temporary only. The rate of the people whose employment was obviously tempo-
rary (seasonal), also showed a considerable and continuous increase (Table 3).
4) Among those entering the provision system and are not at the beginning of
their career, however, the rate of first entrants has decreased considerably since
1995, while according to the figures of job centres there are no changes in the
number of entrants (those becoming registered unemployed), neither in the number
or rate of the unemployed at the beginning of their career. All this means that more
than 90%, in some counties even 98–99% of entrants not at the beginning of their
career have already been unemployed, so they are returning clients (Table 4).
16
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
The high rate of those who are not fist entrants but have acquired entitlement to
some kind of benefit compared with all those granted some kind of benefit refers to
the significance of active means and shortages in their efficiency. Not unlike the
figures of the previous table, this indicator also emphasizes the same regional dif-
ferences that could be seen in the case of the activity rate.
All in all it can be stated that, without a considerable development of economy
and without a considerable increase in the number of new jobs, at least two thirds
of all the unemployed registered with a job centre, and the vast majority of the
unemployed not registered with a job centre are threatened by being pushed out of
the labour market for a long time or even for ever. What is more, taking the spe-
cific Hungarian economic and social transformation processes into consideration
and on the basis of experience gained so far, it is highly probable that the over-
whelming majority of the long-term unemployed belonging to older age-groups,
coming from crisis industries, unskilled labour force or those with a trade that is
Figure 4
Proportion of long-term unemployed (over 180 days) within all registered
unemployed
Source: T-STAR database, 2000, Hungarian Central Statistical Office.
17
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Table 3
The primary reason for the unemployed seeking new jobs (figures expressed in
percentage)
Year
Lost their Quitted their Their sole Their sea-
Finished Discharged Family or Young mothers Termination
Others
jobs
jobs
proprietor- sonal work
their
from the
financial
on child-care of child-care
ship wound
is over
studies
army
reasons
leave, students
leave
up
or pensioners
wanting to work
1992
73.46
8.16
2.08
0.65
8.48
0.81
3.35
0.35
0.00
2.66
1993
72.95
7.13
0.33
1.96
9.51
1.88
2.38
1.76
0.00
2.11
1994
68.54
8.06
2.21
1.84
10.78
2.51
1.68
1.47
0.00
2.91
1995
67.44
8.20
1.78
2.03
11.61
2.08
1.78
1.48
1.93
1.68
1996
66.53
8.45
0.37
2.84
11.14
2.05
2.16
1.45
2.74
2.26
1997
60.42
9.49
2.62
4.53
9.37
2.43
3.16
1.49
2.95
3.53
1998
59.44
9.95
2.42
5.01
9.00
2.59
3.41
2.04
2.42
3.72
1999
56.91
11.13
2.01
6.89
10.46
1.87
1.94
1.45
3.39
3.96
Source: KSH. Time Figures of the Survey of Labour Force 1992–1999.
18
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Table 4
The rate of first entrants not at the beginning of their career and that
of those who are not first entrants but are entitled to some kind of benefit com-
pared to all entrants (monthly average – %)
County
The rate of first entrants not at
The rate of those who are not
the beginning of their career
first entrants but are entitled to
compared with all entrants
some kind of benefit compared
with all entrants
1995
1997
2000
1995
1997
2000
Budapest
35
28
22
10
14
36
Baranya
24
10
2
46
33
55
Bács-Kiskun
22
17
7
45
37
52
Békés
11
8
1
61
53
62
Borsod-Abauj-Zemplén
9
7
–2
58
41
59
Csongrád
21
11
5
44
34
50
Fejér
23
22
11
41
31
52
Gyır-Moson-Sopron
23
22
17
44
41
53
Hajdú-Bihar
15
8
4
51
40
55
Heves
13
11
2
56
47
58
Jász-Nagykun-Szolnok
12
7
2
58
44
60
Komárom-Esztergom
20
13
9
46
37
54
Nógrád
13
6
2
59
55
68
Pest
28
27
17
38
28
47
Somogy
16
11
6
57
47
63
Szabolcs-Szatmár-Bereg
5
2
–2
64
46
58
Tolna
20
13
3
50
32
59
Vas
27
21
16
42
38
53
Veszprém
14
13
7
55
43
59
Zala
24
16
10
40
34
54
Country
20
14
6
46
37
55
Note: The negative figures in the table come from calculation with monthly averages
Source: OMKMK. Time Figures of Unemployment Registration 1995–2000.
difficult to convert, or the long-term unemployed with a low degree of adaptability,
as well as mostly uneducated, unskilled gypsy unemployed will be pushed to the
periphery of the labour market even in the case of an economic boom and moderni-
zation. In their case only a state-supported, rather costly and complex training and
employment programmes may improve their situation moderately. (During transi-
tion, and in the period following it, the chances of younger generations with more
up-to-date knowledge become more favourable, but as far as individuals are con-
cerned there are always some exceptions.)
19
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Regarding changes in the rate of unemployment, striking differences can be
seen between towns and villages, urban and rural areas.
In 1994 45% of the unemployed lived in villages, which was much higher than
the rate of the village population compared with the whole population (37%). As
for the distribution of the unemployed on the basis of where they live there were no
changes till 1998, but, except for big villages, every kind of village had more un-
employed inhabitants than in 1994. The unsafe situation of rural areas can be
proved by the fact that the smaller number of inhabitants a village has, the higher
the rate of unemployment is and the more rapid the growth of the number of the
unemployed is (Bódi–Obádovics, 2000). (Table 5.)
In 1994 the danger of long-term unemployment threatened smaller villages
more than big ones or towns. In very small villages the rate of those long-term
unemployed was almost as high as 70%. Until 1998 their rate fell to almost half of
it, and the backwardness of rural areas began to slacken. The changes are caused by
the characteristics of the registration system and factors of interest as well as the
increase in the number of those pushed out of the labour market permanently,
rather than an increase in successful and lasting returns to the world of work.
2.2.3 Composition of long-term unemployed people
The composition of those long-term unemployed is markedly different from the
demographic composition of the whole population and unfavourable features are
strengthening.
As far as the distribution between sexes is concerned, the originally higher
number of unemployed men, which had been the result of a lot of redundancy in
industry was continuously decreasing. In 1993 41.1% of all long-term unemployed
people were women, subsequently 58.9% were men on a national level. By 2001
there had been some minor changes in the ratios. Owing to the fact that the chances
to get a job were better for men, the difference in the ratio of sexes among all long-
term unemployed people was getting smaller (women: 42.2%, men 57.8%) (Nagy,
2001).
The ratio of women in the rural population was lower, partly because of the
higher number of those employed in tertiary branches, which reacted in a less sen-
sitive way to the redundancies made necessary by the change of system, and partly
because women in villages were more likely to be housewives, fewer of them got
to the labour market than those of the same age-group in towns, so a much smaller
number of them became registered unemployed (Bódi–Obádovics, 2000). In four
years, however, the rate of unemployment of women in villages rose in reverse
relationship with that of men as a result of the fact that it decreased at a smaller
pace than the rate of unemployment of men (Table 6).
20
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Table 5
Distribution of the unemployed among towns and villages of different size and
legal status (1994,1998)
Unemployed people
Villages
Country
Budapest
Country
towns
total
under 500
with
with
with more
total
without
inhabitants
500–999
1000–2999
than 2999
Budapest
inhabitants
inhabitants
inhabitants
1994
Number (1000 people)
20,2
35,4
109,3
81,1
246,0
241,8
58,3
546,1
–
Rate (%)
3,7
6,5
20,0
14,9
45,1
44,3
10,7
100,0
For 12–24 months
25,2
24,9
25,7
25,4
25,4
24,2
25,1
For more than 24
42,9
42,3
41,1
38,0
40,0
37,2
36,8
months
1998
Number (1000 people)
16,5
27,3
82,0
60,1
185,8
186,4
34,2
406,4
–
Rate (%)
4,1
6,7
20,2
14,8
45,7
45,9
8,4
100,0
For 12–24 months
21,9
20,7
22,2
21,4
21,7
20,9
21,0
For more than 24
11,6
9,2
10,6
11,1
10,7
11,9
11,1
months
Source: Bódi-Obádovics, 2000.
21
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
The distribution according to age showed the dominance of older age-groups.
The most remarkable change was that the rate of the long-term unemployed who
were younger than 19 years of age decreased considerably. As a result of the de-
crease in unemployment and the requirements of employers of the private sector,
the rate of unemployment within this age group had become negligible by the year
2000. In the opinion of some experts, private companies prefer to employ begin-
ners or those coming from the state sector rather than unemployed people. Another
reason for the considerable decrease is that after 1995 those who could not find a
job right after leaving school were not registered as unemployed. Since those be-
longing to younger age-groups are generally more active, take part in retraining
courses in higher numbers and so it is easier for them to meet the expectations of
the labour market, there was a decrease in the rate of the 20–29 year-olds, too
(Csaba, 1999). Besides, with the rate of the middle-aged being almost the same,
the rate of older age-groups, i.e. the rate of those over 40, rose from 40% to 48.6%
Figure 5).
Figure 5
Proportion of women within the long-term unemployed (over 180 days)
22
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Source: T-STAR database, 2000, Hungarian Central Statistical Office.
There is no significant difference between the composition of age and types of
villages and towns, which again underlines the more backward situation of rural
areas since the rate of working-age people is lower in smaller villages. That is why
belonging to the younger age-group does not reduce the danger of becoming un-
employed in small villages (Bódi–Obádovics, 2000).
As far as education is concerned, a higher rate of those with a lower level of
education was typical among long-term unemployed people. There was some in-
crease in the rate of the uneducated, i.e. those with 8 classes of primary education
only, or even less than that, though not a considerable one. Their total rate changed
from 46,9% to 47,6% by 2000, and to 48,9% by 2001, and they continue making
up nearly half of all long-term unemployed people. In spite of the fact that propor-
tions hardly changed in the examined period, the number of the uneducated de-
creased considerably. The number of those long-term unemployed decreased by
32,294 such people who had not even finished their 8-form primary school studies,
and by 130,875 people with only primary education. The reason for this is that a lot
of mostly old long-term unemployed people had retired, or had become inactive.
In rural areas most of the unemployed had a level of education lower than the na-
tional average. 42% of the unemployed living in villages had completed maximum
8 classes of primary school, 10,3% of them had not even completed their primary
school studies. The two groups make up more than half of all unemployed villag-
ers. There was a decrease in the rate of better-educated unemployed people in vil-
lages, too, but only to a smaller degree than in towns, which made the chances of
unemployed villagers to find jobs on the labour market more unfavourable (Table
7, Figure 6).
The mental situation is based on empirical research. Zoltán Jószai states that a
considerable part of all unemployed think they are less useful and appreciated
members of society whereas the other part does not seem to be affected by social-
psychological harms. The latter group consists of women, country people and those
having a low level of education, mostly those whose life is based on several pillars,
and those around them do not look down on them just because they are jobless.
A further group is made up of those who irritate the population with their life-
style, behind their apparent unemployment there is a considerable financial back-
ground, a high income, which they very often do not even conceal. Their number
can be estimated on the basis of the number of those who reject community work.
Among those willing to do community work the number of those on sick pay is
higher than in the case of those with similar jobs. The reason for this is not only the
worse health conditions of workers but also work morale and attitude to work
(Jószai, 1998).
23
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
In 1997 13% of all long-term unemployed people had never had a job, which
raised a new kind of social problem and harmed the chances of successful em-
ployment.
Table 6
Distribution of sexes among the unemployed according to the legal status
and size of towns and villages (1994–1998)
Sex of the
Villages
Country
Country Rate of the unemployed
unemployed
towns
total
living in villages
under 500
with
with
with more
total
without
compared
inhabitants
500–999
1000–2999
than 2999
Budapest
to the national rate
inhabitants
inhabitants
inhabitants
1994
Women
37,1
37,8
38,9
40,6
39,2
41,9
41,5
42,7
Men
62,9
62,2
61,1
59,4
60,8
58,1
58,5
47,1
Total
100,0
100,0
100,0
100,0
100,0
100,0
100,0
45,2
1998
Women
38,9
40,5
41,5
44,0
42,0
46,6
45,2
42,6
Men
61,1
59,5
58,5
56,0
58,0
53,4
54,8
48,6
Total
100,0
100,0
100,0
100,0
100,0
100,0
100,0
45,9
Decrease in the rate between 1994 and 1998 (1994 = 100%)
Women
85,6
82,6
80,0
80,2
80,1
85,8
81,1
Men
79,5
73,8
71,7
69,8
72,8
70,8
69,7
Total
81,6
77,1
74,6
74,0
75,5
77,1
74,4
Source: Bódi–Obádovics, 2000.
24
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Table 7
Distribution of the unemployed according to the level of education in towns and
villages
with different legal status and size (1994, 1998)
Education
Villages
Country
Country
Rate of the unem-
towns
total
ployed living in vil-
under 500
with
with
with more
total
without
lages compared with
inhabitants
500–999
1000–2999 than 2999
Budapest
the national rate
inhabitants inhabitants inhabitants
1994
Less than eight classes
13,7
11,5
10,2
9,0
10,3
6,5
7,8
59,4
of primary education
Eight classes
45,3
42,0
42,0
41,1
41,9
31,1
35,9
52,9
Vocational schools
32,0
34,4
34,6
34,9
34,5
37,1
35,2
44,3
Secondary education
8,8
11,6
12,7
14,4
12,8
23,3
19,5
29,8
College, university
0,6
0,9
1,0
1,1
1,0
2,8
2,3
19,5
1998
Less than eight classes
10,4
9,2
8,0
6,7
8,0
4,6
5,9
61,5
of primary education
Eight classes
43,9
42,3
40,9
39,7
40,9
29,6
35,0
53,7
Vocational schools
34,7
35,0
36,0
36,2
35,8
37,5
36,0
45,6
Secondary education
10,1
12,6
14,1
16,2
14,2
25,1
20,6
31,6
College, university
0,9
0,9
1,1
1,3
1,1
3,3
2,5
20,6
Source: Bódi-Obádovics, 2000.
25
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Figure 6
Source: T-STAR database, 2000, Hungarian Central Statistical Office.
2.3 Relationship between long-term unemployment and other
regional characteristics
Unemployment has shown significant differences in various regions and types of
villages.
a) On one hand the so-called ‘east-west slope’ has developed. While the rate of
unemployment in Budapest and in the western counties has always been far
under the national average, it has always exceeded it in the eastern and
north-eastern parts of the country.
b) On the other hand, there are further significant differences in the rate of
unemployment within counties and smaller districts. Among smaller regions
differences may be as big as tenfold, (at the end of 1993 the difference be-
tween the rates of unemployment in Sopron having the most favourable
situation and Encs, Nagyecsed, Gönc, the least favourable districts, was ex-
actly tenfold). (Table 8.)
26
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
c) Finally, the differences between the individual types of villages and towns
are not negligible either. There is a high rate of unemployment especially in
small villages and in those that are far from cities. This is partly the result of
the dramatic decrease in agricultural labour force. Between 1990 and 1993
the number of those employed in agriculture decreased by 520,000, and this
high degree of work force reduction in agriculture changed the situation of
village people dramatically. On the other hand the labour supply had ex-
ceeded the demand of the local labour market earlier, so till the end of the
1980s more than one million people commuted between where they lived
and where they worked. Such commuters were the first to lose their jobs and
getting back to their village they added to the number of the unemployed
(Laki, 1996). It was all the more difficult for commuters to find a new job
because employers simply could not afford to cover their travel expenses.
Therefore those living in villages are much more inflicted by unemployment
than those living in towns (Tóth–Varga, 1994).
The difference between the life conditions and chances of the population in big
cities and in rural areas is growing continuously. The inhabitants of rural regions
tend to fall behind increasingly and to a larger extent than the differentiation of the
whole of the population. Of six ex-socialist countries (Poland, Bulgaria, Russia,
Slovakia, The Czech Republic and Hungary), this hopeless situation seems to be
the most insoluble in Hungary. In the opinion of Csite and Kovách, the ‘backward-
ness of the country’ is partly the result of political activities. After the change of
system the political leaders did away with the farm-structure of agriculture in an
extremely short period of time, which had not only economic-political reasons but
it also dispersed the managements of co-operatives. However, while liquidating the
co-operatives no actual alternatives were offered to replace them. The properties of
the co-operatives were privatized in a controversial way, as a consequence of
which the former losers of collectivization lost the major part of their property for
good. Members of co-operatives that did not own any land, were left with no agri-
cultural jobs. Since all central resources had been withdrawn from the economy,
neither agriculture nor the local industry could employ the people living there.
From the beginning of the 1990s smaller villages could hadly cope with the ever
growing number of social tasks resulting from the increase in the rate of unem-
ployment simply because they had not enough financial resources. Owing to the
small number of inhabitants, the local personal income and trade contribution could
not as much ensure their own financial resources as in big cities (Csite–Kovách,
1997).
27
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
Table 8
Micro-regions with the highest rate of unemployment
Name of the
Number Number
Number
Rate of the Rate of those long- Number of vil-
micro-region
of inhabi-
of the
of those
long-term term unemployed lages with a rate
tants
unem-
long-term unemployed compared with all
of more than
ployed
unem-
within the unemployed peo-
10% of long-
ployed
population
ple
term unem-
ployed people
Sellyei
13,312
1,492
883
6.6
59.2
13
Encsi
35,307
4,098
2,291
6.5
55.9
10
Vásárosnaményi 37,245
4,240
2,292
6.2
54.0
3
Szerencsi
63,217
6,640
3,809
6.0
57.4
4
Edelényi
35,702
3,646
1,889
5.3
51.8
6
Szikszói
19,885
1,982
1,005
5.1
50.7
1
Nagykállói
32,009
2,578
1,540
4.8
59.7
1
Polgári
14,497
1,236
695
4.8
56.2
–
Tiszafüredi
41,509
3,741
1,974
4.8
52.8
1
Sátoraljaújhelyi
43,353
3,860
1,994
4.6
51.7
5
Nyírbátori
44,587
3,828
2,045
4.6
53.4
2
Sárospataki
28,024
2,308
1,188
4.2
51.5
1
Salgótarjáni
68,124
5,331
2,846
4.2
53.4
–
Szigetvári
27,894
2,368
1,165
4.2
49.2
3
Baktalórántházi
23,614
2,215
983
4.2
44.4
–
Ózdi
75,276
6,353
3,101
4.1
48.8
–
Kazincbarcikai
64,649
5,433
2,660
4.1
48.9
1
Mátészalkai
66,477
5,190
2,709
4.1
5.2
–
Csengeri
14,135
1,201
561
4.0
46.7
–
Note: The micro-regions in bold italics are the sample regions of the research.
Source: KSH TSTAR 1998.
Regional differences in unemployment are comparatively big and they have be-
come bigger with the growing rate of unemployment, but they have been practi-
cally unchanged in recent years. As it turns out from Károly Fazekas’s examina-
tions, the regional differences of unemployment are not the result of short-term
individual cases but strategical characteristics, long-term historical and cultural
traditions and features of individual regions (Fazekas, 1997). Consequently the
changes in the labour market at the beginning of the 1990s resulted in a more se-
vere shock, especially where the original situation had been unfavourable. With the
help of factor analysis, which is suitable to point out the factors of regional differ-
ences, the marked differences are attributed to four main factors by Károly Faze-
kas:
– degree of urbanization,
– degree of development of the tertiary sector,
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– the distance of the regional centre from Budapest and the Austrian border,
– proportion of gypsy inhabitants (Éder, 1996).
Due to the effect of the above factors regarding unemployment figures the areas
along the axis of Budapest and Vienna, the environs of big cities, environs of Lake
Balaton and Budapest, and the southern part of the Great Hungarian Plain have
favourable conditions. The opposite pole is the north-eastern part of the country
and the middle and eastern parts of the Great Hungarian Plain. The extremely low
rate of employment of the areas inflicted by crisis sectors of industry can be looked
upon as exceptions. Typical regions struggling with the highest rate of unemploy-
ment, are the agricultural regions that had been pushed aside earlier, too, and that
had weak infrastructure, not well-educated human resources, an underdeveloped
trade and service sector (Fazekas, 1997).
The regional division of long-term unemployment is also influenced by the
above mentioned regional factors. In the regions with long-term unemployment
there is a definite lack of enterprise. The existing farming organizations, which
have mostly emerged from former co-operatives, have a very low demand for la-
bour force, a simplified structure of production and a very low level of exploitation
of the means of production. They cannot even guarantee the continuous employ-
ment of their extremely low number of employees. In the case of the stagnation of
production further, at some places as high as 20–30%, redundancy can be expected.
Private farms, if there are any, are only able to employ a fraction of ‘free’ labour
force (Tóth–Varga, 1994). For lack of important employers and other economic
entities, local governments are often forced to economic activities.
In the most threatened regions there is an ever increasing difference between the
demand and supply of labour force. There may be a demand for better trained
labour force, but its quality is the lowest in these regions. Consequently labour
shortage and long-term unemployment may be typical simultaneously. Erika
Csabai thinks that the demand of the regional labour market plays an important part
in unemployment becoming long-term. She is of the opinion that the question of
whether there are any vacancies available in the village where the person made
redundant lives or at least not far from it, affects long-term unemployment much
more than personal characteristics (Csaba, 1999).
In the most critical areas more than half of all registered unemployed have not
found a job for at least half a year. Most long-term unemployed people live in the
North-Hungarian region, which is the most severely inflicted by unemployment.
Their rate of unemployment exceeded the annual average of 54% in 1997. (Borsod-
Abaúj-Zemplén, Heves and Nógrád counties). Gyır-Moson-Sopron, Vas and Zala
counties in Transdanubia and Bács-Kiskun, Csongrád and Békés counties on the
Great Hungarian Plain are in the most favourable situation. Compared with the
number of the population the most (4% and above) long-term unemployed people
live in the following micro-regions.
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3
Foreign methods and experience in alleviating long-term
unemployment
3.1 Typical models
In the course of the recession following the first and the second oil crisis, unem-
ployment practically trebled in industrial countries, what is more in some countries,
(Belgium, Spain), it became six times and nine times as high as it had been
(OECD, 1992). At the same time extremely big regional differences became typical
within individual countries, as well, and the attempts to solve the problem of un-
employment by traditional centralized therapies, i.e. by different social security
benefits or unemployment benefits, by decisions made centrally (from top to bot-
tom), and by co-ordinational mechanisms remained ineffective. As the system of
unemployment and social benefits could not prevent families and communities
affected by unemployment from sinking into poverty neither from the depression
of the whole local society, the demand for the replacement of the passive way of
granting benefits by active methods of support, i.e. for local labour market man-
agement techniques and programmes of development of local economy became
increasingly strong.
Governments of highly developed market economies, local governments in the
affected regions, organizations of safeguard, companies and other social and eco-
nomic institutions reacted to the changes comparatively quickly and the models for
the main initiatives for managing regional employment crisis focusing on job crea-
tion beyond the main stream of the labour market were formed in a very short pe-
riod of time and accepted and exercised more and more widely. Local employment
initiatives built up from bottom upwards are different from the way profit-oriented
companies try to help and also from traditional active means of labour market.
Their basic characteristic feature, the active means of labour-market become more
and more significant, the importance of the subventions aiming at the increase in
the demand for labour force decreases, however, labour market training becomes
more important and the programmes supporting the increase in the enterprise ca-
pacity of the area get bigger preference. They are development programmes that
usually but not exclusively aim at personal services and activities that are useful for
individual smaller communities, i.e. the organization of jobs that could not be cre-
ated without special employment support. They are important means and media of
social cohesive forces, partly because they ensure job opportunity for groups of the
labour market at a disadvantage, especially for those long-term unemployed. On
the other hand the created jobs are socially useful, for example because they pro-
vide low-cost services for those having had financial background and for depend-
ants and they also help to develop new markets often on a local level and in small
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proportions. They mostly are of a self-supporting nature. The programmes may be
especially successful in developing new products and services, first of all in en-
couraging the growth of oecological markets. Since it is only after a comparatively
long period of time that these projects become financially viable, the state sector
has to take financial part in granting subsidies necessary for the start and also has
to help to set up the organization and develop work structure (Frey, 2001).
Various categories are set up according to how severe the danger of unemploy-
ment is and how necessary programmes of employment development are. On this
basis there are four categories, the first one being developed agricultural regions,
which are very often far from economic and political centres and from which
skilled labour force migrates to other regions. The second category includes town
agglomerations with a diversified economic structure; the third one includes re-
gions with an overwhelming proportion of crisis sectors and with a one-sided eco-
nomic structure. The fourth category includes regions with mixed economy, where
both industrial and agricultural activities are present. As a general principle it can
be stated that the programme to be formed has to adjust to the characteristic fea-
tures of the region and to the nature of the problems that have to be solved
(Fazekas, 1993).
The declared purpose of these programmes is to reach the groups at the periph-
ery of society, the groups that are in danger of being excluded from the world of
work ultimately, they have to help them to return to society, in which the primary
task is to improve both their chances of employment and their overall situation. In
this sense these initiatives may mean the first and the most important step, i.e. they
try to make them suitable for getting steady jobs later. All this makes comprehen-
sive, concerted activities consisting of several elements (employment, training,
social support, mental care, access to information, counselling) necessary. The
operators are the already ‘existing’ participants of the labour markets, first of all
non-profit organizations. Their services and products involved in the projects will
be sold on the market, from which they have their own income. Besides their eco-
nomic activities they have important social functions, which profit-oriented com-
panies cannot be expected to aim at and this is what makes subsidies necessary for
a certain period of time, generally in the beginning.
Through the support of the European Social Fund these initiatives exist in all of
the member states, and owing to the Phare support they have appeared in the Euro-
pean ex-socialist countries, too. However, the part they play in the labour market is
still negligible.
The European countries have reacted to these challenges in three basically dif-
ferent ways. These reactions have been influenced by the specific problems and
local conditions of the given country (group of countries).
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a) In Great Britain the development of market forces had priority, as a conse-
quence of which the expenses of both active and passive supports have decreased.
Within the active means the less costly programmes inciting people to look for jobs
– have gained importance, whereas supports trying to increase employment have
practically ceased. To solve the problem of long-term unemployment this model
supports three kinds of initiatives:
– bridging support, which enables the unemployed to be trained and gain work
experience at the same time
– support for community enterprises, which are expected to become self-
supporting after a certain period of time
– supporting young unemployed people so that they may become entrepreneurs
(benefits, loan, counselling)
b) In Germany the system of job-creating measures, which relies mostly on
public funds and is basically an independent sector (socio-oecological sector), is
called second labour market. As regards the different rates of unemployment in the
eastern and western parts of the country, the programmes launched in these two
areas show significant discrepancies. In the western part of the country the attempts
to make those long-term unemployed or those who find it extremely difficult to
find a job return to the labour market are more typical, whereas the high number of
employment enterprises in the eastern part of the country is the result of the total
collapse of the economy, i.e. the groups the latter initiatives try to aim at are more
highly-educated, more motivated and younger than in the former case. Employ-
ment projects have three purposes:
– setting up companies, which may become self-supporting in a certain period
of time,
– bridge-role with the purpose of training and stabilizing the unemployed so-
cially and psychologically through community work, which is the first step to
enable them to return to the market sector by sending them to vacancies,
– creating protected jobs to employ people who are not capable of joining the
labour market, neither temporarily nor regularly.
c) France has made the biggest progress in applying the model aiming at a sig-
nificant increase in the rate of employment by organizing the services provided for
households and individuals to a market, which has been called ‘social economy’
since the White Book of the EU. The measures taken with the purpose to develop
the service sector have been applied for more than a decade in the country. An
estimated number of several hundred thousand full-time jobs can be created in
these areas. Taking advantage of these opportunities depends on three factors, on
the availability of actual payments, organization of supply and the level of the ser-
vices (professionalization of trades).
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The first and the most important condition is that services should be affordable
for households, which depends on supports granted to reduce their prices. (Price
reduction creates jobs, which justifies supports economically.) Such supports can
be: tax-allowances, company contribution to the personal services of employees,
reduction of expenditure on wages, supported job contracts.
The demand for services greatly depends on the choice of services, i.e. on the
scope of supply. This can be developed by: introducing financially supported or-
ganizational forms and tax-allowances.
And in order to increase the level of services: quality trademarks have been in-
troduced, the process of professionalization was accelerated by developing and
supporting vocational training.
3.2 Typical techniques
While trying to solve employment problems the efforts to increase the enterprise
capacity of the region have always had priority. Whereas the basic aim of local
governments was to attract profitable companies to the region and in this way in-
crease the local tax-paying potential, since the 1980s financial support of existing
enterprises and safe employment have become more important (Bennett–Krebs,
1989). This statement is first of all valid for the countries of the EU, but certain
signs of it can also be felt in Hungary already, mainly in the economically more
developed areas.
In the field of enterprise development revitalisation programmes based on the
characteristics of the area have become increasingly important. There is a special
emphasis on the following:
a) operating the management of the local labour market;
b) strengthening the market of local products, community marketing;
c) strengthening the local capital market;
d) developing an innovative technological environment (conditions for techno-
logical parks, innovation centres, incubator houses and work from home);
e) development of co-operatives;
f) organization of mutual aid societies and community enterprises.
The management of the local labour market (Campbell, 1995) is aimed at
achieving harmony between local employers, local labour and local economy while
keeping their interests in view. It examines the innovation and diversification op-
portunities of employers, their labour force demand, and the ways of how to satisfy
it, in the hope of being able to create new jobs for one or several local inhabitants
and preserve the old ones. With full knowledge of the explored correlations the
efficient labour-market management focuses first of all on mobilization, network
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development and information of those involved in the labour market and connect-
ing the supply and demand side the market, e.g. local labour market observers,
training institutions, universities, development agencies, local governments, em-
ployment and enterprise advisors, managers of employment projects, local com-
munities and their leaders, trade unions.
In regions with severe unemployment, strategies focus on developing labour-
intensive economic sectors and encouraging the ‘hard core’ of the unemployed to
join in. The four basic methods of employment-centered development of local
economy are the following:
1) preparation of labour force for the vacancies offered by employers;
2) widening market opportunities for products or services that add to the num-
ber of vacancies;
3) trying to find socially useful, (even if only seasonal) jobs;
4) organizing and sending unemployed people to vacancies (training and
retraining are just one of possible methods, and employment problems can-
not be solved by mere training).
In the countries of the European Union the following innovative solutions have
become widespread (Campbell, 1995):
– Agreements between partners: schools, universities, training institutions and
employers reach an agreement in order to connect education and training and
employment in a direct way. Training courses are designed with employers
involved and the other way round, employers are willing to employ a certain
number or all of the participants of training courses. In this case the demands
of employers and the skills of potential employees will meet.
– Training courses geared to those involved: training courses which prepare
members of socially disadvantaged groups for jobs provided by a certain em-
ployer.
– Setting up ‘Training Help Points’ in order to increase the range and
accessibility of information about existing educational and training opportu-
nities. They usually aim at a special group of people or region, since those at
a disadvantage on the labour market do not usually have sufficient informa-
tion, either.
– Safeguarding of interests: the value of local workforce can be increased by
introducing qualifications indicating the skills and abilities of participants of
the labour market and by having these qualifications accepted as well as by
developing a local system a references. In the interest of employees employ-
ers should be encouraged, if possible compelled, to avoid any discrimination
according to sex, ethnic or age in their methods of selecting new labour force
and to pay acceptable wages.
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– Organizing public services may also help the participants of the labour mar-
ket who are both geographically and socially at a disadvantage when trying to
overcome the obstacles others than those in connection with skills and abili-
ties. E.g. setting up day nurseries and kindergartens with reasonable opening
hours for their children.
– Return strategies aim at employing those again who disappeared from the la-
bour market for a while, and are at a disadvantage in some way. Such a strat-
egy can be studying besides a part-time job in order to develop a commit-
ment, refresh abilities and prepare for a job.
– A typical way of direct creation of jobs is employing those with unfavourable
social background in local public institutions, where they do some kind of
community work to satisfy local demands (e.g. protection and improvement
of the environment, public utilities, construction work, maintenance of
buildings, security service or looking after old people). The same jobs can be
done in the form community enterprises, too.
– Encouraging self-employment by counselling, providing professional aid for
a longer period of time. It is a wide-spread method for young people.
– ’Non-market’ methods of local exchange and trade are used when there is a
direct exchange of services, ‘vouchers’ between the members of the commu-
nity, which makes it possible to have jobs that are done in the interest of the
community and in order to satisfy its needs acknowledged.
Strengthening the local market is one of the basic strategies of self-develop-
ment. Improvement of the chances to enter the market has three aspects: improving
external sales, strengthening local services and organizing non-market economic
activities into a system. The key to the establishment of the local market is diversi-
fication. It does not aim to serve small local economic entities, as it did in the past,
but helps the village to adjust to systems of bigger areas. On one hand strong local
market is a precondition of the growth of the resources of those entering the mar-
ket. On the other hand it also contributes to their resources. One of the most im-
portant criterions of the local market is that the owners of the resources, (labour
force, land and capital) should mostly be local people (Miklóssy, 1999).
A special means of strengthening the local market is community marketing, when
institutions of the public sector (state, local government) play a part in it.
A special, innovative way of the improvement of the degree of capital supply is
the solution that ‘loan circles’ provide. This alternative model offers the following
possibilities:
– Access to credit for those who have their own business ideas, but cannot meet
the requirements necessary for raising a loan from traditional credit institu-
tions;
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– Intensive training in order to acquire the knowledge of how to set up and
operate micro-enterprises;
– Development of a network providing social and professional support.
The idea of the incubator houses of entrepreneurs appeared at the beginning of the
1980s. The aim of the institution of the incubator house is to increase the chances
of the new enterprise and help its development in the beginning (to reduce the dan-
ger of winding up the enterprise, its vulnerability and to increase its profitability).
In the incubator house of entrepreneurs there are premises, supports and services,
which are adjusted to the special needs of newly-founded companies.
The functions of incubator houses are as follows:
– Supply of real estates – changeable, enlargeable premises for a limited period
of time at a lower price than that of the free market;
– Shared services – commonly used equipment and services mainly in the case
of office work (secretary’s office, telex, conference hall, etc.)
– Counselling entrepreneurs – in the fields of control, marketing, accountancy,
research and technological transfer, privileged links to the academic envi-
ronment.
– Exchange between the entrepreneurs, integration into the professional net-
work, technical and moral support of the management. The incubator house
reduces the isolation of the management in the fragile period of the life of the
enterprise, strengthens the soundness of the new enterprise. Access to infor-
mation and other services is of the utmost importance.
The idea of co-operatives is not a new one at all, although it is looked upon as
one of the innovations. ‘By co-operatives we mean an association in which several
economic entities conduct some kind of transaction or have it conducted in one
common plant while the economic entities preserve their independence’ (Márton-
Szeremley, 1995).
Co-operatives can be distinguished from companies, e.g. joint stock companies
on the basis of three principles:
– One member – one vote, i.e. the right to take part in decisions does not de-
pend on the financial share
– The aim is to reach the highest possible purchase price rather than to increase
the profits of the company.
– The accumulated gains are turned back into production
The revival of co-operatives reached its peak in regional development in the
1990s.
On the basis of foreign examples it is easy to see who those participating in the
efforts to find solutions for employment problems are, and to confirm the fact that
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a solution can only be the result of co-operation of those involved and division of
labour. Partners co-operating to alleviate long-term unemployment are:
a) the unemployed themselves and their families,
b) central government and its institutions,
c) organizations for safeguarding interests,
d) local governments,
e) local entrepreneurs,
f) training institutions,
g) civil organizations.
3.3 Employment objectives of the European Union
The main issues of the policy to increase employment in the European Union were
determined in Luxembourg in 1997. The objectives of the year 2000 are as follows:
(Nagy, 2001).
I Employability – a new, active labour force policy to prevent unemployment,
long-term unemployment and discrimination.
– preventing the long-term unemployment of young people,
– preventing the long-term unemployment of adults,
– supervising the system of benefits and taxes, stimulating people to look for
jobs, encouraging an active old age,
– stimulating social partners to sign employability agreements,
– ensuring conditions for life-long learning, especially information technology
and encouraging the participation of elderly employees,
– improvement of the school system in order to decrease the number of young
people dropping out,
– development of the qualifications of young people,
– active policies to support handicapped people, ethnic minorities and other
groups in unfavourable situation.
II Enterprise – a new employment policy to create jobs, especially in the field
of services and to exploit the job-creating effect of information society.
– a considerable reduction of maintenance costs and the amount of paper work,
– encouraging self-employment and enterprise,
– exploiting local employment opportunities, the role of social partners,
– benefiting from the job opportunities in the service sector, information soci-
ety and in the environment sector,
– decreasing general taxes and non-wage like costs of labour force,
– examining the decrease in the rate of the General Turnover Tax.
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III Adaptability – a new policy at work to stimulate social partners to modern-
ize work structure and to develop human resources.
– agreements of social partners on the modernization of work structure,
– more flexible job contracts according to the various employment forms,
– supervision of tax-like obstacles in order to refresh professional knowledge
within the enterprise.
IV Equal opportunities – a new policy to make the harmony between family
life and life at work possible and to apply the principle of equal opportunity in all
measures of employment policy:
– enforcement of the principle of equal opportunity in policies,
– balance between the unemployment rates of men and women, enforcement of
the principle of equal wages for both sexes,
– initiating family-friendly measures and services,
– making the return to the labour market easier.
The above mentioned objectives can be found as recommendations in national
employment policies and the programmes of the European Union. Supplementary
programmes of the Union are: European Social Fundm, EQUAL – community
initiative.
4
Hungarian experience in alleviating long-term
unemployment
4.1 Individual strategies of long-term unemployed people
The fact that long-term unemployed people are usually socially disadvantaged, too
means a real obstacle for them to be able to change their situation on their own.
Lack of qualifications goes with social, mental and health problems. Meanwhile,
employees’ habits, attitudes and the unconscious restraint on their performance in
past decades make it rather difficult to make positive changes in their situation and
to handle the phenomenon on a national level (Mátyási et al. 1991).
In recent years more long-term unemployed people living in the country have
chosen the above-mentioned individual strategy and have earned the necessary
income in agricultural small-scale production. The research financed by the Na-
tional Employment Fund in 1993 involved 449 people who had been trying to find
a solution by becoming agricultural smallholders and by joining farmer’s unions.
The results of the research show that most agricultural small enterprises have taken
the first steps only and can only be regarded as a kind of enterprise that were set up
under the pressure of circumstances. In the mid–1990s the only thing that could be
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registered was that most of those affected were forced to follow the strategy of
having several steady sources of income, i.e. completing their income from their
agricultural small enterprise with other sources. So, at best, it is some agricultural
part-time job that they have as a second job, otherwise it is a supplementary agri-
cultural activity besides a pension, unemployment benefit, social benefit, etc. The
capital, equipment, markets and their share of the market etc. of the examined
small enterprises lag far behind the level determined by international trends and
competitiveness (Laki, 1996). By the mid–1990s conditions (accessibility of capi-
tal, economic risk, markets) had changed to such an extent that it became obvious:
small-scale production cannot solve the problems caused by unemployment.
Both the strongly limited number of vacancies in the country and the inappro-
priate level of education and vocational training pose an obstacle to successful
employment. The individual strategy to overcome this obstacle may mean partici-
pation in some form of training and conscious self-management. The motivation to
take part in training courses is extremely low.
Because the two most obvious strategies of restart has proved to be impractica-
ble for some (objective or subjective) reasons, two typical layers have appeared
among those long-term unemployed:
1 A group has appeared that has been pushed to the periphery of society on all
levels. The complete lack of opportunities makes it impossible for them to
take part in the division of labour offered by market economy in any way.
Their situation ‘under society’ is reproduced again and again because with
no qualifications their children will follow in their footsteps. Most of them
are gypsies, which makes finding a solution all the more difficult.
Traditional methods are by no means to the purpose so ‘rural underclass’ has
become one of the major social problems of the turn of the millennium
(Csite–Kovács, 1997).
2 The other group is a bit more successful but all they can achieve is survival.
They develop a way of living which makes it generally acceptable that they
do not intend to undertake a steady job, just some casual ones, they prefer to
work in household farming or reorganize the division of labour in the family.
They are careful to be able to certify employment long enough to entitle
them to renewed unemployment benefit. However, this layer is active after
all, they have preserved their ability to work. They will undertake steady
jobs again, if the local supply of vacancies broadens and if they can earn a
payment that is higher than the social benefits they are otherwise entitled to
(Nagy, 2001).
It is just a smaller group, the third one, that is able to have steady employment
again, and the members of an even smaller group may become entrepreneurs. The
most socially disadvantaged layer is represented by families where there are neither
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active breadwinners, nor pensioners, their members are either unemployed, or on
child-care leave or dependents.
The results of the survey carried out among the participants of the social land
programme reinforce the above facts. Most of those asked would first of all like to
work somewhere on a regular basis or they rely on social benefits. The members of
a minor part of this group do not know what they will do, childbirth or retraining
seem to be temporary solutions for them. Farming on the field of their own does
not seem to be an attractive and/or realistic opportunity. A high proportion of
gypsy beneficiaries wish to have a proper job, they count on social benefits, insecu-
rity is not typical among them, but some of them are preparing for setting up an
enterprise or they intend to have some more children. Social benefits, day-wage
and retraining opportunities come second in the order of importance. Regular em-
ployment does not seem to be a realistic opportunity any more, but undertaking an
enterprise under pressure as a possibility is regarded as more feasible. Insecurity is
bigger in this case. Those in charge of the social land programme, which aims at
encouraging people to work in agriculture, may draw a lesson from the fact that
beneficiaries do not want to do farming on their own piece of land, not even in the
second (or third) place, although one fourth of the whole sample have got their own
suitable arable land. The gypsy people interviewed are more unwilling to take part
in a retraining course they prefer/they feel more compelled to work for day-wage
than those who are not of gypsy origin. If asked about what would happen in the
third place, almost the whole sample becomes quite uncertain saying ‘we shall
manage somehow’. Going on with innovation dimensions it is important to under-
line that the higher the number of those living in one household, the higher the
proportion of the answers ‘we shall manage somehow’. The idea of enterprise,
retraining or daywage is brought up vaguely, but after two ‘unsuccessful’ attempts
their typical attitude to life is hopelessness. In this third phase there are no differ-
ences within the sample, neither territorial nor ethnic differences, almost everybody
represents the point of view of ‘we shall manage somehow’.
4.2 Government programmes
Since the 1991 enforcement of the act of employment and provision of the unem-
ployed, the individual elements of the system, the registration system and provision
of the unemployed, the information system and operation of job centres as well as
the so-called active means of employment policy to prevent unemployment and
help the jobless to find a job again have become everyday routine. And it is so in
spite of the fact that in the past ten years almost all elements of the system have
undergone radical changes. Besides the natural ambition to handle the anomalies
and problems arising during the operation of the system, these changes, from the
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points of view of budget and financing, have mostly caused an increased relative
shortage of resources of employment policy. Consequently, instead of the optimali-
zation of the operation of the system, it was the distribution of the resources and
the ambition to exhaust them as fully as possible and to solve the most urgent
problems that played the most important part.
The policy of the government and the activity of employment offices focus on
applying traditional means even today in spite of the increasing number (though
still a low proportion) of complex labour market programmes, which aim at smaller
groups, improve chances of employment even on the long run in a more appropri-
ate way, but are more time-consuming and costly. This can be seen in the objec-
tives of the Labour Funds and the programmes of the National Employment Fund
(OFA) and in the exploitation of their resources.
4.2.1 Labour Market Fund
By concentrating and administering financial resources of unemployment and vo-
cational training uniformly, the Labour Market Fund (MPA) finances unemploy-
ment benefits, adaptability of labour force, the social security of employees of eco-
nomic entities under liquidation, development of vocational training and employ-
ment of people with reduced working capacity and ensures financial conditions for
the operation of the labour market organization.
Before the Labour Market Fund (MPA), from 1991 to 1995, the present alloca-
tions worked as an independent Fund. Until 1995 the Fund and then Allocations
did not essentially change as far as their objectives and function are concerned,
only certain tasks expanded.
As for the operation of the Labour Market Funds, it has got two well distin-
guishable functions. One of them is provision and the other one is support. Those
applying for support have to do so by on the basis of the legal measures relating to
it, and it is paid from the Solidarity Allocation. The sums paid from the Employ-
ment, Vocational Training, Rehabilitation and Wage Guarantee Allocations are
qualified as support.
The incomes of the Labour Market Fund are made up of employers’ contribu-
tions, other incomes, rehabilitation supports, repayments, contributions to voca-
tional training, paying off loans for vocational training and sums from privatiza-
tion.
Between 1996 and 1998 67.5% of the incomes of the Labour Market Fund came
from employers’ contribution and 22.2% from employers’ contribution. The two
kinds of contribution made up 90% of all incomes. 5.3% of the income of the La-
bour Market funds came from vocational training contribution. In 1996 the receipts
from the budget subsidy and the privatisation income were equivalent with the
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estimated incomes of the Fund. In the same year the income from privatization was
7.2%. Between 1996 and 1998 the receipts from other incomes were 1.4%. Nearly
half of other incomes increased the employment allocation. The majority of other
incomes came from the violation of agreements, volunteer payments and other
kinds of incomes. The most important source of income was the repayment of sup-
ports paid for job creating investments earlier.
0.7% of the receipts of the Fund resulted from the rehabilitation contribution
and the repayment of rehabilitation supports. In 1998 there was an increase in both
the per capita sum of the quota-type obligations and the number of those obliged to
pay a contribution. The employer is obliged to pay a rehabilitation contribution to
help the employment rehabilitation of those with a reduced working capacity, if the
number of his employees is more than 20, and the number of those with a reduced
working capacity employed by him makes out less than 5%.
The expenses of the Labour Market Fund are included by the individual alloca-
tions on the basis of the same legal title of expenditure as follows:
– Employment Allocation – active employment support;
– Vocational Training Allocation – support and development of vocational
training;
– Solidarity Allocation – unemployment benefit;
– Supplementary Unemployment Benefit Allocation – contribution to supple-
mentary unemployment benefits, social benefits, and employment of those
entitled to them;
– Wage Guarantee Allocation – meeting the wage obligations of economic
entities under liquidation towards employees;
– Rehabilitation Allocation – contribution to the employment of people with re-
duced working capacity;
– Operation Allocation – operating and developing the National Organization
of Labour and the Trustee of the Fund.
The employment allocation is of utmost importance from the point of view of
alleviating long-term unemployment. It is used for helping employment, preventing
unemployment and handling the situation of socially disadvantaged people. Be-
tween 1995 and 1998 it had 24.5% of the Labour Market Fund, which meant
64,078.4 million Ft. The bigger proportion of the allocation (80%) is distributed
between counties and the capital. The counties with a disadvantageous labour mar-
ket get more financial resources for distribution for the purpose of supporting
training, unemployed people becoming entrepreneurs, widening the range of em-
ployment: wage subsidy, community work, job creation, maintenance of jobs, tak-
ing over contributions in connection with employment, employment of young un-
employed people.
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Within the Labour Market Fund, from the employment allocation in 1996
15,081.8 million Ft and in 1998 26,163.1 million Ft were spent on financing active
employment on both central and decentralized expenditure. Within the employment
allocation sums spent on decentralized expenditure were distributed between coun-
ties and the capital as follows: between 1995 and 1998 Borsod-Abaúj-Zemplén
county got 14.9%, Szabolcs-Szatmár-Bereg county 9.5% and Hajdú-bihar county
6.6% whereas Vas, Zala, Gyır-Moson-Sopron were granted only 1.8; 2.3; and
2.4% from the employment fund.
Of all supports granted by the employment allocation between 1994 and 1998
the amounts paid for community work were the biggest, 35.7% compared to all
other supports, while 26.4% were spent on training, 16.4% for other purposes,
12.8% on wage subsidy and the least sum, 8.6% was spent on creating new jobs.
The financial aid for community work can be granted to local governments and
non-profit organizations which send unemployed people to carry out community
work. The employment office can reimburse maximum 70-90% of their direct ex-
penses resulting from employment on the basis of contractual agreements and sub-
sequent monthly accounts. The financial assistance paid for community work has
the greatest share from the Labour Market Fund, i.e. 35.7%, which was continu-
ously increasing from 1994 to 1998. In 1995 the scope of traditional community
work was widened by its special forms done by those entitled to supplementary
unemployment benefits. In 1996 employment offices spent 2568.8 million Ft on
the community work done by those entitled to supplementary unemployment bene-
fits. In the same year 85.4 thousand people entitled to supplementary unemploy-
ment benefit participated in community work. In 1998 8694.4 million Ft was dis-
tributed from the decentralized employment allocation by employment offices. In
the same year 116.1 thousand people took part in community work, (3.8 thousand
of them at the beginning of their career). The most backward counties, i.e. Borsod-
Abaúj-Zemplén county had a share of 16.3%, Szabolcs-Szatmár-Bereg county
10.7% and Budapest 8.2% of all financial assistance spent on community work.
The least amount was granted to Vas, Tolna and Gyır-Moson-Sopron counties.
Financing the training of employees is one of the most important elements of
active employment policy both in the counties and in the capital. The state subsi-
dizes vocational training and retraining and refresher courses in different forms. In
1996 3208.0 million Ft was spent on labour market training by employment of-
fices. In the same year 66.8 thousand people took part in this kind of training. In
1998 the biggest amount and proportion was spent again on labour-market training
(735.6 million Ft). The number of people involved in this training in 1998 was 81.7
thousand, with 2.1 thousand people in the central training programme, and 24.4
thousand at the beginning of their career. Between 1994 and 1998 the financial
assistance spent on training was 26.4% of all employment allocation. Between
1994 and 1998 the majority of all supports spent on training young people were
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granted (with the exception of Budapest and Pest county) to the more backward
counties, (e.g. Borsod-Abaúj-Zemplén county 8.6%, Hajdú-Bihar county 6.8% and
Jász-Nagykun-Szolnok county 5.9%).
Financial aid provided for covering wages can be applied for by employers that
submit their applications to the local employment office and in return of the finan-
cial aid are willing to employ unemployed people who have been registered for at
least six months as well as lengthen their employment for at least the same period
of time after the termination of rendering aid. Rendering financial aid to unem-
ployed young career starters registered for at least three months with the purpose of
enabling them to acquire work experience is one of the different kinds of financial
aid granted for covering the expenses on wages. In 1996 1808.8 million Ft was
spent on employment of those long-term unemployed and on wages, with 29.7
thousand beneficiaries. In 1998 1832.6 million Ft was spent on wages, 2266.8 mil-
lion Ft on creating opportunity to acquire work experience with 49.6 thousand
beneficiaries of the employment aid, 23.3 thousand of which were career-starters,
(20.1 thousand took part in acquiring work experience). Between 1994 and 1998
the aid spent on wages was 12.8% compared with the aids granted by the employ-
ment allocation. The most aids spent on wages were granted to underdeveloped
counties struggling with employment problems, such as Szabolcs-Szatmár-Bereg
county (10.9%), Borsod-Abaúj-Zemplén county (10.7%), Békés county (7.0%).
The least proportion was used up by Baranya and Somogy counties.
Providing financial aid for creating jobs was possible until 2000 in the case of
regions with an especially low rate of employment to help long-term unemployed
layers to find jobs. The regions could apply for this kind of financial aid to em-
ployment offices by competition. After it, with the exception of development aids
granted from the rehabilitation allocation, support decisions were centralized. The
financial aid spent on creating jobs makes up the least, 8.6% (7922.2 million Ft) of
all aids provided by the employment allocation. In 1996 employment offices used
up 832.1 million Ft from the decentralized funds for creating jobs. In 1998 this sum
was 32,508.8 million Ft, 1552.6 million Ft of which was spent on traditional job
creation, which, together with the 128.3 million Ft job-creating investment fi-
nanced by regional development made up a total of 1680.6 million Ft. The finan-
cial aid granted to encourage self-employment was 8.9 million Ft. In 1998 more
than 3,000 new jobs were created and financed from the decentralized allocation.
The financial aid provided for job creation was the highest in Borsod-Abaúj-Zem-
plén county, 20.2%, in Szabolcs-Szatmár-Bereg county, 10.6%, and in Bács-
Kiskun it was 7.5%. The least financial aid was granted to Budapest, 0.5%, Vas
county 1.0% and Zala county 1.1%.
The financial aids provided for other purposes are rather compound. First of all,
the Labour Market Fund contributes to preparing employers and employees for the
EU, but it also includes the financial aids provided from the employment allocation
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which cannot be placed with any other resources. Financial aids granted for the
purpose of encouraging self-employment, preserving jobs, expenses of taking over
contributions, supporting non-profit organizations and financing collective redun-
dancies have also been ranked here. Between 1994 and 1998 the financial aids
rendered for the purposes was 16.4% of all aids financed from the employment
allocation. Borsod-Abaúj-Zemplén county received 21.5%, Budapest 10.0%,
Szabolcs-Szatmár-Bereg county 8.5%. Vas and Gyır-Moson-Sopron counties re-
ceived the least.
The amount of all financial aids was continuously growing between 1995 and
1998. The distribution of the employment allocation among countries happens with
the help of an allocation model having several factors, but basically in the propor-
tion of registered unemployed people. Taking the financial aids received by the
counties into consideration, Budapest (11.5%) and Borsod-Abaúj-Zemplén county
(10.4%) received the highest financial aid, i.e. 23,850.9 million and 21,478.2 mil-
lion Ft. The lowest financial aid was granted to Vas (2.3%) and Nógrád (3.0%)
counties.
4.2.2 Programmes of the National Employment Public Fund (OFA)
The National Employment Public Fund (OFA), as a public fund of the government
plays an important part in the system of institutions aiming at alleviating unem-
ployment and extending employment. During eight years of its operation OFA has
improved the situation of almost 160,000 people, has received 4,500 applications,
has signed about 1,900 contracts and has granted 6.9 billion Ft financial aid.
The most typical principles and areas of the activity and the support policy of
the National Employment Fund (OFA) are as follows:
– experimental introduction and application of new means of active employ-
ment in backward regions and layers,
– active participation in establishing the so-called second labour market, which
is outside the main stream of the labour market,
– strengthening partner relationships and co-operation between the local repre-
sentatives of employment policy, (local governments, civil, economic and la-
bour organizations),
– contributing to the establishment of complex sponsoring and service systems
and networks,
– co-ordinating resources in financing programmes, consistent application of
joint finance aspects.
The division of applications according to the types of towns and villages has
changed compared with previous years. The dominance of the capital has de-
creased slightly, there has been an increase in the number of successful applica-
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tions submitted by county towns, but most successful applications for financial aids
still come from the capital city. It was in 1999 that small villages were taken first
of all applicants in local and regional programmes in the history of the OFA, and
while more than half of all applications came from the capital, it was 24% of all
those granted financial aid. The last in the order of the different types of towns and
villages receiving financial aids are county towns.
The division of supported programmes according to target groups shows that in
labour market services (first of all FIT and Programmes of the Forum of Career
Choice) the number of students is domineering. The number of unemployed career
starters have exceeded 10,000 in alternative programmes alone. The 1,840 unem-
ployed people employed with the help of the NEF (OFA) consists of mostly career
starters, however, the number of socially disadvantaged young people and that of
gypsies is also considerable. In 1999 altogether 30,534 people took part in finan-
cially aided projects. The number of long-term unemployed people increased con-
siderably, so did the number of gypsies among them. At the same time the propor-
tion of unemployed career starters and of those having reduced working capacity
increased, too compared with previous years.
Applicants are very different according to the type of organizations, too, how-
ever, non-profit organizations became dominant after 1998. Funds, social organi-
zations, non-profit companies, churches and denominations represented 66%, or-
ganizations financed by state budget resources made up 24% (typically as imple-
menters of programmes of the forum of career choice and research programmes).
In 1999 30% of those receiving financial aids were associations, 18% were funds,
4% non-profit companies. 10% of participants of the market were limited compa-
nies, 5% sole traders, 4% co-operatives and 3% were partnerships. (Table 9.)
The rate of participation of counties and the capital reflects the average of the
previous years both as far as the number of submitted applications and the rate of
successful applications are concerned. After the capital city the most applications
arrived from Hajdú-Bihar county. Csongrád, Baranya and Zala counties were the
most successful, because almost 50% of the applications from these counties re-
ceived some kind of financial aid. From this point of view Szabolcs-Szatmár-Bereg
county has managed to strengthen its position, while Hajdú-Bihar and Borsod-
Abaúj-Zemplén counties had only 30–33% again. Regarding the submitted appli-
cations, after the capital, Szabolcs-Szatmár-Bereg, Borsod-Abaúj-Zemplén and
Hajdú-Bihar counties got forward (more than 60 projects arrived from all the three
counties). In 1999 34% of 708 applications received a financial aid, which is the
same as the average of the previous years. The first on the list of successful coun-
ties is Zala (50%), the second is Veszprém (45%) and Baranya is the third (41%).
Since its foundation, the NEF (OFA) has regarded the competitions advertised
for the non-state organizations of the labour market as a part of its support pro-
grammes.
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Table 9
Sums spent on NEF (OFA) programmes in 1998–1999
Serial
Support programme
Sum of the support (Ft)
number
1998
1999
1
The support programme of Social Partners SZP-99
199,964,536
99,950,000
2
Restart programme UK-99
95,606,109
80,000,000
Support for professional meetings and publications for the
24,898,000
19,468,000
3
non-state organizations of the labour market NP-K
Support for local governments of villages inflicted by flood
89,916,074
4
and inland waters ÁV-99
5
Job seeking R-99
104,000,000
103,500,000
6
Complex programme for work from home TM-99
28,000,000
Support for programmes of developing local economy and
103,824,000
7
local entrepreneurial initiatives GF-99
8
’I work again’ programme
79,446,000
109,999,000
UD-99
9
Mass redundancy
98,744,891
TL-99
10
Research into labour K-99
58,056,000
56,746,932
Support for community and non-profit enterprises, personal,
75,265,000
11
(social) services NP-SZ
Transit-employment programmes of organizations carrying
250,000,000
234,515,000
12
out non-profit activities NP-T
Alternative labour market service programme for non-state
65,131,000
71,607,000
13
organizations of the labour market NP-A
Programme for local governments with the purpose of
115,554,000
14
employing unemployed people for a longer period of time or
supporting the maintenance of families ÖK-99
Programme to develop and strengthen small enterprises in
149,967,400
15
operation VF-99
Support for local employment programmes aiming at per-
372,970,000
137,021,000
16
manent employment NP-V
Establishment of an Employment Information Counselling
26,000,000
29,930,000
17
Service FIT-99
Encouragement of part-time employment and extension of
23,319,696
36,779,700
18
employment RM-99
Professional Forums for Choice of Career
12,600,000
Other programmes
118,050,000
Total
1.271.479.981 1,846,324,997
Source: www.ofa.hu.
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On the basis of the experience in the past six years, the NEF (OFA) made and
advertised a concerted, complex system of several elements to support employment
and service programmes of non-profit, non-profit organizations in 1998. The tender
programmes provided the following for the non-state organizations of the labour
market (funds, associations, non-profit companies):
– alternative labour-market services,
– supporting the programmes aiming at lasting employment and local activity,
– professional, methodological help of organizations involved in alleviating un-
employment, e.g.:
• professional and methodological services of associations consisting of
non-profit organizations involved in employment,
• supporting the organization of conferences and meetings as well as issuing
publications financially,
• operating and developing a monitoring system,
All in all, 235 applications for 4,074,000 thousand Ft financial aid arrived from
the non-state organizations of the labour market. The fact that about 60% of all
applications of the year 1998 were submitted for the programmes of non-profit
organizations (75% of all claims of the year) indicates partly the activity and re-
source claim of the sector and partly that the second labour market is getting
stronger.
In 1998–1999 the NEF (OFA) was running about twenty different programmes
spending altogether 1.2 and 1.8 billion forints. The most typical programmes are:
1) The reintegration programme for the realization of training and employment
– Transit Employment
In 1998 the NEF (OFA) advertised the transit employment programme for sup-
porting the combined training and employment programme of the unemployed at a
disadvantage on the labour market, and their labour-market reintegration in a fur-
ther developed form. The supported programmes are meant to provide vocational
training and employment for socially disadvantaged young people struggling with
behaviour and adapting problems, and young people under state care or addicts
who have not completely recovered yet and young people without secondary edu-
cation.
Transit employment projects are aimed at implementing a training form which
is combined with employment, does not belong to the educational system and at the
end of which students are awarded OKJ (National Training Register) qualifica-
tions. Such training projects are preceded by a thorough selection, career orienta-
tion, remedial or refresher courses, motivation, completed with continuous services
for solving the psychological and social problems of the participants and followed
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by their employment and after-care. In 1999 two kinds of applications were ac-
cepted. Partly the applications of non-profit organizations that were submitted for
financial aid for a further cycle of a transit employment that had been accepted
earlier by the NEF (OFA), and partly the applications of organizations which
wanted to launch a transit project for the first time. There were six applicants of the
former type (’old’ applicants) and twenty-one (’new’) applicants of the latter type,
who had to submit their applications in two steps. Five of the ‘old’ applicants, who
had accomplished all their tasks for the first cycle, received a total of 235,526 mil-
lion Ft. Seven of the ‘new’ applicants managed to get through the first round and
six of them submitted their application of the second round, too. Due to lack of
resource, the NEF (OFA) could not support these applications.
2) Programmes for providing alternative labour-market service
The programmes aimed at typically special groups of people who were at a dis-
advantage on the labour market and were difficult to reach by the institutions of
local governments and applied complex means to be able to consider the personal
problems and ambitions of the unemployed, too. The primary purpose of the ser-
vices provided by the programme applying for a financial aid was to reach those
not registered and those registered and long-term unemployed as well as unem-
ployed young peole who had completed their studies or were career starters and
those who, due to some special problem (health, education, social background, etc.)
could hardly find employment on the labour market without help, or for whom the
only opportunity could be a steady, protected and socially motivated employment.
Its secondary purpose was to reach those non-state organizations, which had taken
over the solutions that could serve as models. While evaluating the applications,
preference was given to the programme which was aimed at a special group of
people or at those who had never taken part in state services of the labour market.
Between 1996 and 1999 the Advisory Body of the NEF (OFA) supported 64
alternative labour market service programmes with a total of 390 million Ft. More
than 200 applications have been submitted for the competition so far. At present 24
programmes are being realized. It is a good thing that the financing possibilities of
local programmes have been expanded. As a result of the amendment of the em-
ployment act in the year 2000, and according to Act Flt 13/A §, by providing ser-
vices the labour-market organization may contribute to seeking vacancies, obtain-
ing jobs or suitable labour force as well as preserving jobs. While realizing
alternative programmes a bigger emphasise has been placed on establishing the
quality system of labour-market services since last year. In accordance with the
decision of the advisory body the quality control objectives of nine organizations
were granted financial aid in the year 1999. The training and attitude of quality
control encouraged in education, health and social areas have also strengthened the
demand in the labour market, employment sector for testing, introducing and
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applying quality systems. Important results have been achieved in this field, so it
will remain one of the main objectives for organizations providing alternative
labour-market services to support quality-conscious process organization, control
and development activities and the application and completion of services with a
quality system. On the basis of the experience of the year 1999 the purpose of the
Public Fund is to establish the quality system of the NEF (OFA) and to compile the
Handbook of Quality Control in the years to come. As a part of it a ‘NEF (OFA)
Quality System Standard’ specified for the sector and target group has to be
compiled for the organizations implementing labour-market services and projects.
3) ‘I work again’ programme
The objective of the financial aid programme is to establish service points for
long-term unemployed people so as to provide person-oriented alternative labour-
market services for them. The ‘I work again’ programme, which is the adaptation
of a British model, is a special labour-market service based on local partnerships,
and establishes partnership between the organizations interested in alleviating
unemployment. By using specific and geared methods, it helps the unemployed to
access complex services, and to fit themselves to the labour market again. It
develops direct and personal relationships with both sides of the labour market:
with the employer and the employee, it shows an attitude to both directions that is
helping, supporting and initiative. Its target groups are: long-term unemployed
people, among them those granted a supplementary unemployment benefit,
unregistered unemployed, gypsies, those with reduced working capacity, homeless
people, ex-convicts and those who had grown up in state care. The programme
provides an alternative method for alleviating long-term unemployment, which is
useful for all the people of the local community involved in solving the problem,
both for the local government and for other participants of the economy. In 1998
14 applications were submitted by long-term unemployed people in the subject of
the realization of the special service, five of them was supported by the advisory
body and they were granted a total of 79,500 thousand Ft. They have the intention
of involving 4650 people in the programmes altogether and wish to employ 1400
people. The organization carrying out the program had to undertake to operate the
new service providing unit for at least two years, and develop partnership with
other participants of the labour market. The NEF (OFA) meets 80% of all expenses
necessary for carrying out the programme. Associations, funds and non-profit
companies could take part in the competition.
4) Supporting the personal (social) service activities of community and non-
profit companies
The programme tests if, with civil organizations co-operating, the non-profit
sector is capable of creating new jobs in the area of health, social and personal
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services, and whether there is a solvent demand of households for certain services.
The primary purpose of the programme is to increase the number of the employed
by expanding employment and by integrating the service of personal help provided
free of charge or as black work in private homes into the world of organized work.
In the framework of the programme there is an opportunity to increase the
employment capacity of the social sector by establishing community, non-profit
companies, as well as by contributing to the maintenance of existing ones. Last but
not least the program intends to help the co-operation between local governments
and non-profit organizations by providing not costly but efficient social services.
To achieve the above-mentioned objectives, the Advisory Body of the NEF (OFA)
ensured about 90 million Ft for the realization of seven programmes, which creates
the conditions for employing 110 unemployed people. The project plans of 1999
have again verified the assumption that the employment capacity of personal
(social) services can be increased with the co-operation of the civil sector, i.e. it is
worth devoting knowledge and further resources to it as these employment
possibilities can be expanded.
5) Supporting the organization of meetings for non-profit organizations and
publications
The purpose of supporting conferences is to enable the dialogue between
organizations, institutions and people working for alleviating unemployment, to
contribute to making the results of the efforts to alleviate unemployment, and the
programmes realized by non-profit organizations public as well as giving publicity
to their ambitions. Supporting publications is a good way of informing the
unemployed and the non-profit organizations, which means helping them as a
target group more extensively. The supporting programme helps non-profit
organizations to get to know the Hungarian and international practice of alleviating
unemployment and the applied means and models. The target group of the
programme consists of associations, funds and civil organizations taking part in
alleviating unemployment.
6) Support programme for financing initiatives to develop local economy and to
encourage enterprises
As a result of the professional co-operation between the Ministries of Labour of
the USA and the Hungarian Republic the project called Rapid Response was
present in Hungary between 1994 and 1999. It was its mission to encourage the
Initiatives to Develop Local Economy and to Encourage Enterprise (HGVK), i.e. to
take part in planning and co-ordinating local development processes and launching
concepts and programmes elaborated together to develop economy, (investments,
encouragement of enterprises, improvement of the rate of employment). The
American programme closed in the summer 1999. In order to benefit from the
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results and to make the model serve on, the Prime Minister’s Office initiated an
Agreement of Co-operation between the Ministry of Economy, the Ministry of
Social and Family Affairs and the Ministry of Agriculture and Regional
Development to continue the programme. Within its framework NEF (OFA)
undertook to continue it temporarily and in May 1999 it advertised the HGVK
partnership programme. The purpose of the programme is to encourage local,
micro-regional initiatives to develop economy and self-organizations to support
compiling micro-regional strategic plans and programmes to develop economy, to
help micro-regions, especially the backward ones struggling with an employment
crisis situation, catch up with other regions, to co-operate in launching job creating
processes and encouraging enterprises. It should also provide financial aid to the
evaluation of the situation, strategic plans and the determination of actual
development projects. The 1999 application of the NEF (OFA) urged to launch
processes that were based on the co-operation of the participants of the micro-
region, (local governments, entrepreneurs, civil organizations): The success of the
programme is proved by the fact that there were 70 applications submitted to the
competition, 27 projects of which were supported by the Advisory Board with 107
million Ft.
7) Restart Programme
The Restart Programme makes unemployed career starters with a low level of
education suitable for labour-market training as well as helps them to adjust to the
labour market. It also includes complex projects which help unemployed young
people to adapt themselves to the society and find employment as soon as possible.
In the years 1998 and 1999, 92 organizations handed in project plans to the Restart
programme of the NEF (OFA), 27 of which were financed by the Advisory Board
with a total of 176 million Ft. In 1999 most applications arrived from the most
backward counties of the country. 26 organizations from the North Hungarian Re-
gion, (Szabolcs, Borsod, Hajdú and Békés counties), 12 organizations from the
South Transdanubian Region, (Baranya, Somogy and Zala counties), which makes
out more than one third of the applicants. There are two supported organizations
from Budapest and 25 from the country. 11 organizations from the North Hungar-
ian Region, (Szabolcs, Borsod-Abaúj-Zemplén and Hajdú-Bihar counties), nine
organizations from the South Transdanubian Region, (Baranya, Somogy and Zala),
i.e. more than two thirds of the applicants were sponsored by the NEF (OFA). The
final evaluation of the results of the Restart programme will take place in spring
2001, but it is obvious now, too, that less than 25% of the almost 400 unemployed
young people taking part in 13 supported projects dropped out. The best results,
(the lowest number of those dropping out, the highest number of those finding
jobs), were achieved by the organizations that had a considerable network of per-
sonal or formal organizational (state, market, non-profit) relations. The least effi-
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cient are the organizations that cannot communicate with the target group in an
appropriate way, and cannot handle the emerging conflicts successfully. Although
the NEF (OFA) will not advertise the Restart programme as an independent pro-
gramme in 2000, but it has built its individual elements into the employment pro-
grammes both for gypsies and for local people.
8) Supporting programmes for non-profit enterprise activities with the purpose
of lasting employment
Since 1996 the NEF (OFA) has been giving preference and supporting local
employment initiatives with considerable amounts of resources. Such projects are
mainly carried out by non-profit organizations and contribute to the development
of the secondary labour market. In this case local efforts aim at services and activi-
ties that are useful for the local community and that create jobs for long-term un-
employed people. Such projects play a socially important part because, as a result
of local co-operation and collective acquisition of resources they provide services
at a low price, and they also contribute to the development of local (new) markets
and to the operation of local economy. According to the experience of the NEF
(OFA) the process of their becoming strong and self-supporting requires much time
and studying, and setting up and operating organizations as well as developing
local programmes need considerable professional and financial support. The 1999
programme supported local initiatives which are aimed at long-term unemployment
by self-supporting community programmes. The programme consisted of four top-
ics. The first two included the support of the programmes of non-profit organiza-
tions that have surplus remainings and contribute to the employment of people with
reduced working capacity. A new feature is supporting programmes aiming at cul-
tural and educational activity. In the course of the same year 43 applications were
submitted, 16 of which were granted a financial aid of 140 million Ft, which made
it possible for 218 unemployed people to find jobs. During last year’s competition
it was verified again that through the programme the secondary labour market is
expanding and there is an increase in its employment capacity, too, and models are
forming, which are able to work in a market-conform way and save costs and are
cost-efficient. The most important thing about the programme is that there is a de-
crease in the number of the unemployed and their chance to get to the labour mar-
ket is increasing.
9) Programmes of local governments contributing to the employment of the un-
employed and /or their self-support
Most difficulties in economy, especially tensions originating from unemploy-
ment affect local governments. People usually expect local leaders elected by them
to solve their subsistence and social problems. According to the experience of the
NEF (OFA) local governments are interested or can be made interested in solving
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the tensions caused by the local employment rate and they are ready to make use of
their own resources for this purpose. It could be seen from the experience gained
from the experimental tender programmes in 1996 in Borsod, Nógrád and Szabolcs
counties, when the NEF (OFA) supported the local government programmes that
were aimed at lasting employment of unemployed people or helping families to
achieve self-support. It meant 103 million Ft financial aid for 30 programmes with
the participation of about 860 unemployed people. By now most of them have
proved to be successful. The 1999 employment policy of the government pointed
out that programmes have to be elaborated and realized to help groups that are at a
disadvantage from the point of view of the labour market to find jobs again, and to
contribute to the improvement of equal opportunity of employment for those living
in backward areas. Consequently the 1999 competition was aimed at improving the
employment rate of socially disadvantaged people living in small villages, (with
less than 5000 people) all over the country. Financial aid was granted to the local
governments that wanted to implement local employment programmes (to protect
the built and natural environment, to develop the social provision system, to make
use of tourist attractions, etc.). Applications came from all over the country, which
was a sign of the favourable reception of the competition opportunity. 1344 people
were planned to be involved in the programmes. The Advisory Body supported 18
applications out of 69 with a total of 115 million Ft. The supported local govern-
ments can be found in 10 countries. 15 of the supported projects intended to
achieve lasting employment and three of them to help the unemployed and their
families to achieve self-support. Local governments involved 510 people in these
programmes. According to the experience of the NEF (OFA), it is worth focusing
on and ensuring resources for local employment projects that can be connected to
regional development programmes, too.
10 Support programme to develop and strengthen active small and agricultural
enterprises
a) Small enterprises
Small enterprises play a decisive role in creating new jobs after the change of
system in Hungary. Therefore the government pays a special attention to the
improvement of their employment capacity. In 1999 the NEF (OFA) adver-
tised competitions for the fist time as an experiment, the aim of which was to
support programmes for active small enterprises that intend to increase the
number of their employees so as to develop and make their enterprise sound
as well as make use of professional counselling services and by marketing
improve their marketability and competitiveness and promote their company.
With the programmes aiming at an increase in the number of employees and
counselling NEF (OFA) supported the enterprises that employed career start-
ers and/or registered unemployed people who had been retrained by employ-
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ment offices for at least a year. In the programme aiming at increasing the
number of employees the expenditure on wages of the employees and/or the
extras of the expenditure on wages whereas in the counselling programme the
expenses of counselling could be supported. In the information programme of
promoting the company the NEF (OFA) provided financial aid for publishing
and popularize the material including the information. 47% of applicants
were sole traders, 12% were partnerships and 41% were Ltd-s. The financial
aid provided for enterprises made the employment of 23 unemployed people
possible.
b) Agricultural enterprises
The social-economic changes of the last century caused serious problems es-
pecially in agriculture. The unfavourable effects of these changes were fur-
ther worsened by the natural disasters that agricultural enterprises have had to
cope with several times in recent years. The chance to reduce the damage of
agricultural enterprises of the villages that had been hit by the 1999 disasters
caused by flood, inland waters, heavy rains and storms by competition meant
a kind of expansion of the already existing support programme aiming at de-
veloping and strengthening active small enterprises. The target group of the
programme consisted of those who were employed in agriculture and due to
the damage done by flood and inland waters could not work on their fields
and would probably have been dismissed as a result of the damage their em-
ployers had to suffer. The enterprises of the affected villages could submit
their applications for support for the wages of those manual workers who
they had intended to dismiss. The NEF (OFA) supported 67 applications with
a total of 345.9 million Ft. In this programme.
In spite of the impressive programmes, the amount of the sums spent on the
programmes of the NEF (OFA) is quite negligible and their proportion is not
growing either. Another trend within the NEF (OFA) programmes is the increase in
the number of the programmes which are advertised by exclusive competitions, on
the basis of invitations.
4.2.3 Supporting social land programmes
With unemployment growing and labour market marginalization and segmentation
strengthening, the universal entitlement of social protection began to cease in a
legal and a hidden way (Standing, 1993). The progress of the changes in social
policy which was giving up the idea of universalism was accelerated by the appli-
cation of active means.
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The social land programme as a social transfer can be traced back to the bill of
the Hungarian minister of Home Affairs, Ferenc Keresztes-Fischer regarding the
National People and Family Protection Fund in June 19th 1940. After it the experi-
ment called ‘County Public Welfare Co-operation Mátészalka’ was launched by
Lajos Esztergár. The main principle of the activity was that benefits and poverty
policy are not the appropriate methods to improve the situation of the needy in an
efficient way, so he left the form of the solution of social tasks to the economic
sector. His social altruistic co-operation ‘gives loans to every individual in need so
as to make it possible for them to get economically strong, get rid of their financial
difficulties and be able to be independent (Esztergár, 1941). It is also important
that benefits should be adjusted to individual needs. (Stages: goat → goose →
chicken → pig → beehive and house) and if ‘the person in need has not got the
necessary morals and knowledge, help should be combined with imparting knowl-
edge and teaching him how to economize’ (Esztergár, 1941).
The revival of the social land programme in the 1990s is based on this idea of
handling the micro-mezzo-macro problems/disadvantages in a complex way. The
objective of the land programme is to improve the quality of the lives of socially
disadvantaged families and those long-term unemployed and living in villages and
rural areas and to persuade them to use their labour force in agricultural activities.
The main idea of the project is support sand services in kind.
The support system that makes the development of the land programme possible
is aimed at the least developed areas of the country. The support system that is
working in the form of competition with invitation is available for the villages of
certain regions only. The selection of the regions fits into the national system of
regional development based on statistics by considering territorial disadvantages
and the opinions of county councils of regional development (Serafin, 1997).
According to the examinations done by Zsolt Szoboszlai and his colleagues
(Szoboszlai, 1997), three thirds of those asked would like to continue the land pro-
gramme. The main motivation seems to be supplementing the income, the amount
of food the family needs and the fodder for household farming. One fifth of the
beneficiaries had some income, the scatter and territorial division of which are both
uneven.
Besides financial incomes the social land programme has brought some profits
in kind for the majority, (about two thirds), of favourized families. Its value was
either really smaller than incomes in money, or those involved underestimated it, or
assessed it inaccurately.
The data collected about the ways the incomes had been used up confirm the so-
cial objective of the land programme. Four fifths of beneficiaries spent their land
programme incomes of a few ten thousand Ft. on basic essentials, on food. They
were not enough for buying durable consumer goods or means of production. One
third of those asked, (a higher proportion of the gypsy sample), feel that their lives
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have changed as a result of the land programme. In spite of this the ‘hand-to-mouth
existence’ is rather typical of the everyday lives of beneficiaries.
4.2.4 The effect of employment programmes
The active means applied to prevent unemployment and to contribute to the em-
ployment of the jobless, (training, retraining, wage subsidy, supporting the process
of becoming entrepreneurs, community work, supporting employment in reduced
working hours), have affected hundreds of thousands of unemployed people for
some years. The results of the studies show however, that the efficiency of the
public funds spent for this purpose is rather limited. The mission of the Interna-
tional Labour Organization (ILO) working in the Hungarian Ministry of labour
organized a survey in 1992/1993 with Japanese financial support so as to be able to
analyse the labour market success of people having participated in retraining and
community work programmes. The sample areas were Borsod-Abaúj-Zemplén,
Hajdú-Bihar and Somogy counties. On the basis of the survey it can be stated that:
– After retraining the situation of those taking up a job becomes a bit more sta-
ble, more secure on the long run than in the case of those who have not
grabbed the retraining opportunity, but it is just a slight positive effect that
can be proved. The social utility of retraining programmes could be increased
by more specified programmes aimed at men, elderly people, the less edu-
cated and the unskilled.
– The rate of employment of those participating in community work is only
slightly better than that of other unemployed people. Community work can be
regarded as a successful strategy because it keeps those involved outside the
status of being unemployed, it is a kind of programme that means income, it
prevents people from losing their working ability but is not really an effective
means to enable people to find good jobs (O’Leary, 1995).
On the basis of ample statistical sources the study by Éva Sziklai gives a de-
tailed analysis of the active means of employment policy applied in 1996 (training
support, different methods for encouraging people to become entrepreneurs, part-
time jobs, training programmes for career starters, community work, job-creating
investments, early retirement, etc.) and of the differences in the numbers of those
taking part in the individual means. In 1996 it was community work that contrib-
uted most to alleviating unemployment. Apart from community work the role
played by labour market training and retraining and wage subsidies has to be em-
phasized. Regarding their volume, covering travel expenses, part-time employ-
ment, early retirement and becoming entrepreneurs played a less significant part in
alleviating unemployment in 1996, too. The new employment policy programme
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launched for career starters on July 1st 1996, which was to provide help for young
people by enabling them to gain work experience and by employment supports,
was chosen by fewer young people than expected (Sziklai, 1997).
The programmes where the employment indexes of those involved in active
means are favourable, very often turn out to have supported people who had origi-
nally had more chances to find jobs. It is especially true in the case of jobs created
by retraining and wage subsidy.
The programmes supporting job-creating initiatives outside the main stream of
the labour market, are still of experimental nature and are not very wide-spread.
Consequently, it is not surprising that in spite of the increase in the proportion
of active means and in the number of unemployed people involved in them, the
proportion and number of the unemployed who are threatened by being pushed out
of the world of work permanently is continuously growing.
4.2.5 Problems of approach
The insufficient efficiency is caused by the wrong approach of employment policy.
For example:
– They do not take into consideration that long-term unemployment has eco-
nomic and social reasons and consequences different from temporary unem-
ployment. Therefore:
• Alleviating it is not only the task of the Ministry of Labour but it demands
a wide-range social co-operation, too. The government should encourage
public dialogues especially in the regions with a high rate of unemploy-
ment, publish the statistics of labour market processes and maintain and
enlarge data bases.
• The also have to harmonize the objectives of macro-economic policy and
employment policy by supervising the tax and credit policies. The growth
in macro-economy is not necessarily accompanied by job creation and by
job creation it is not always the long-term unemployed that find jobs, so
the government should elaborate special programmes to encourage creat-
ing jobs for those long-term unemployed.
• With training and education overlapping, a thorough supervision of the
educational system is unavoidable.
– The quality system of employment centres is absolutely indispensable both
for preventing and alleviating long-term unemployment, but civil organiza-
tions and those based on communities can often provide special services
more efficiently, which can satisfy the needs of long-term unemployment
more sufficiently. The government has to encourage and support the co-op-
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eration between employment centres and local partners involved in alleviat-
ing long-term unemployment, so e.g. local governments, community organi-
zations and civil organizations should be supported from various funds, both
from state and private funds. However, a just, efficient and continuous way
of financing has to be based on the evaluation and analysis of the effects of
independent programmes (Employment Policy … 1995).
– Assistance systems themselves have their own mistakes, which can be de-
fined by the concepts of ‘unemployment trap’ and ‘poverty trap’. On one
hand, benefits are comparatively high compared with salaries and wages, so
they do not incite people to try to find jobs. On the other hand it may also
happen that after the expenses of having a job the remaining net income is
lower than the social benefit, and in both cases it is lower than the minimum
sum necessary to cover basic essentials. The changes affecting unemploy-
ment provision have been planned with all these in view. An issue of this is
that regular social benefits can be granted on condition that there is a co-op-
eration with the assigned social institution. The purpose is that the person in
question should be able to improve his own situation the way of which may
range from training to community work. Another of its issues affects the con-
cept of wealth, which means that, above a specified level of property, (real
estates, or valuable movables), the benefit cannot be applied for. The reform
of the pension system, social insurance and disability provision makes har-
monization of social benefits and new insurance systems necessary, giving
priority to the income security of those having reduced working ability. In
principle the basic purpose to achieve is that those able to undertake a job
should make their living on wages, which is not really the near future (Né-
meth, 1997).
The biggest problem, however, is that the development of the labour organiza-
tion and the switch over to market economy were two simultaneous processes, the
organic adaptation to the market environment is not very typical of the organiza-
tion. In the past decade the employment policy has been handling crises, especially
those that were mostly the result of recession and the insufficient operation of mar-
kets. This is the basis for the mentality and the attitude, which, from a kind of anti-
market point of view, regards (has regarded) the substitution, sometimes simulation
of (labour) markets to be the basic task of the labour organization. On the basis of
the experience of the past years this attitude is not tenable. Whether we have the
increase in the inequality of individuals and families or that of regions in mind,
nobody hopes nowadays that these inequalities could be compensated by mere state
redistribution or a financing policy successfully. The efficient market activity is not
only the precondition of the stability of companies or entrepreneurs, but it is also
an unavoidable factor as far as the improvement of the life conditions of employers
and their families and the development of their surroundings are concerned. Today,
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especially regarding the hopefully lasting boom, supporting equal opportunity and
more just access to markets and labour markets has become the primary public
task. All these must not lead to the reduction of public responsibility for those lag-
ging behind or giving up those sinking into poverty (and their big families) in any
way. However, it is obvious that supporting their chances of successful market
participation is an increasingly serious and realistic objective.
On the basis of the expected 5% growth of the GDP alone, a considerable in-
crease can be anticipated in the rate of unemployment. If this growing rate of ac-
cumulation is accompanied by an expansion of personal (e.g. housing), entrepre-
neurial and public institutional investments, it may result in further favourable in-
crease in demand on labour markets. Tax-reforms, reduction of withholding rates
and expenses on employment, especially in low-wage categories, including taxes
belonging to part-time, atypical employment can contribute to these processes con-
siderably. An increase in demand can also be expected from strengthening interna-
tional integration as well as from widening employment opportunities abroad, too.
Although a rise in retiring age or the more severe criteria of disability pension may
result in a temporary rise in the number of the registered unemployed, the primary
question is not the trend of registration but rather the increase in the activity and
employment rates. Unlike the trends of the past years, today it is necessary to
widen the clientele of the labour market organization, trying to involve all those for
whom still there is a chance of employment regardless of their status (inactive peo-
ple, pensioners, dependents, housewives, etc.).
All these make the turn in attitude imperative so the primary task of the labour
market organization is not the protection against the effects of the market any
more, but it should play an offensive, market developing and stimulating part,
which gives priority to access markets and to make successful market participation
more just. The ‘market turn’ does not only imply changes of content but makes
certain changes in attitude necessary, too. E.g. it must not be ignored that in the
issues of employment it is not the labour market organization but participants of
the market that play the most decisive part. The successful employment policy does
not only mean that it is not the state institution that employs people but also that the
effect of its mediatory activity causes changes in the labour market.
According to international experience the role of official intervention into the
employment of the unemployed has decreased considerably in recent years. How-
ever, the forms of assistance of the organization that strengthen motivation, en-
courage, provide counselling and information services for those seeking jobs and
through which the unemployed may have better chances, bigger self-confidence
and self-respect when looking for jobs, have undeniable positive effects. Interest-
ingly enough, the number of vacancies registered with the labour market organiza-
tions of the countries having achieved considerable success in alleviating unem-
ployment and increasing the rate of employment did not decrease in the period of
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success. This means that the primary motivation of success was not the mediary
activity itself but rather that exploring vacancies resulted in an activity hich lead to
an increase in demand on the labour market. The nature of labour markets does not
very much differ from e.g. real estate markets. The appearance of demand gener-
ates further demand, and activity and perceptible demand lead to a rise in prices (in
this case: in wages).
Consequently the disfunctions of the labour market should not be substituted by
direct state means, the state should not simulate, take or fill in the place of markets
but they should influence the operation of the labour market by indirect techniques
of stimulation, regulation and supervision. Such indirect means are:
– Stimulating employment of target groups privileged from a social political
point of view (long-term unemployed people, gypsies, handicapped, elderly
people, etc.), even with subventions (e.g. taking over the expenses on wages)
if necessary;
– Stimulating public purpose, welfare activities of employers (e.g. training);
– Providing intensive, widespread information that is accessible for everybody,
expanding and supporting mediation, counselling and other services;
– Market relations, and supervision meeting modern requirements (civilized,
European), including consistent fight against any form of discrimination and
strengthening institutions providing legal supervision of enforcement of em-
ployees’ rights.
4.3 Initiatives of local employment
Owing to the limited financial and human resource bases of local development the
employment initiatives of villages and micro-regions have basically been deter-
mined by the trends of government supports and the rules of access. Innovative
local and micro-regional initiatives were started first of all by joining the NEF
(OFA), the social land programme and various PHARE programmes.
The objectives, the way of realization and indicators of efficiency of some ac-
tual Hungarian employment policy projects (Social Land Programme of Sarkad,
START Labour Fund of Szentgotthárd, the activity of the Human Service Centre of
Szolnok, social land programmes, etc.) can be studied in the special literature.
(Éder, 1996) The results of the previous research have been reinforced by our own
case studies. In the field of local employment initiatives, according to the research
carried out in small areas having the highest rate of long-term unemployment:
1) Innovative initiatives are less typical of the most backward regions. They
mostly use the means of public utility employment and not very efficiently,
either. They usually take the opportunity of entitlement to supplementary
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unemployment benefit and the conscious, purposeful performance of not
very sensible tasks. A reason for this may be disagreement within the region
or the lack of colleagues having the necessary knowledge or organizational
skills, or both at the same time.
2) Creating new jobs by developing local enterprises is almost impossible, be-
cause there are no local enterprises, and there are no experts of enterprise
development, either. Programmes launched to help the unemployed to be-
come entrepreneurs are hindered partly by the above-mentioned lack of en-
terprise development experts and partly by the composition of the unem-
ployed, but sometimes also by envy. To become entrepreneurs some people
would need such a high financial aid that other local people living in similar
financial conditions could hardly tolerate. A further obstacle to the accessi-
bilitiy of the necessary support is the requirement of the applicant’s own re-
sources.
3) The range of activities of local governments about long-term unemployment
involves mostly ensuring the minimum conditions necessary for the entitle-
ment to supplementary unemployment benefit and encouragement to under-
take casual jobs. Local governments are also interested in that those getting
unemployment benefit, supplementary unemployment benefit or other forms
of benefit should undertake casual work, even if it is not reported, as they
cannot make both ends meet on benefits only (Laki, 1996).
4) A significant way of solving the problem of unemployment is training or re-
training. In 1993 out of 600 thousand unemployed people less than 17 thou-
sand people took part in some form of retraining. All of the different forms
of training are good if they mean some kind of support, even if it is just that
it gives hope and helps preserve self-esteem, and mental, physical and moral
(mental hygienic) conditions. The people’s college as a flexible form suit-
able to adjust to the current direct needs may play an important part in
training the unemployed, including retraining, preserving mental and moral
conditions during unemployment, acquiring the motivations to become open
to new demands. The people’s college programme of vocational training,
retraining and personality development is based on Hungarian and Western
European experience. In may make it easier for those still employed to face
unemployment and it may contribute to preventing unemployment, too. The
people’s college may help enterprises, explore entrepreneurial and market
opportunities or initiate useful community work or other alternatives (Szász,
1993).
5) To solve social problems strong civil organizations are needed, too. Besides
the important part they play, social projects alone are not sufficient without
the support of political decision makers, local governments or administra-
tion. The operation of civil services has to be supported by legal regulations,
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the professional and social public opinion has to be made to accept their
‘bridge’ role. Social projects with their appropriate financial independence,
special training forms guaranteed by professional experts and with strategic
planning are efficient methods of employment policy, but they must not be
‘overburdened’ (Füzessy, 1995).
6) Although still in their infancy, and not known by this name yet, community
enterprises have already appeared. A part of them emerges from the social
land programme, another part is organized in response to the pressurized
economic activity of local governments or civil organizations due to the
complete lack of local enterprises. The pressure to take part in economy is
the result of the necessity to operate and utilize local resources and depress-
ing employment problems.
7) In places where there have been attempts to launch local development pro-
grammes, they usually stop, do not prove to be maintainable after the finan-
cial assistance has ceased. The reasons can be found in the market inviability
of the activities. They prove to be inviable because they are not able to find
the market gap where they could place their special, individual, good quality
products or services. This is mostly caused by the lack of the individual na-
ture of their products, quality problems, or the insufficiency of marketing
knowledge, but most often by the lack of the necessary working capital.
Support programmes do not calculate with these things, either, especially not
by ensuring the expertise and the working capital after the investment pe-
riod. They do not take into consideration that the sales of the products of lo-
cal small serial production requires special expertise, but it is these regions
where there is the least of it. They especially lack experts who could work in
the non-profit, community sector.
8) The fact that target regions lack practically everything that would be needed
for launching enterprises poses a real obstacle to utilization of local re-
sources and the maintenance of the projects in progress. The most serious
problem is the lack of capital, but there is no technological or marketing ex-
pertise or premises or technology suitable for the purpose, either. Inviting
external enterprises that could remedy this situation could be a solution, but
it would involve the danger of losing control over local resources thus mak-
ing local people defenceless. The other possibility could be to ensure the
missing factors in ‘incubator houses’ and following the launched business
activity from a professional aspect for a while. The implementation of this
idea is made all the more difficult by the fact that in the Hungarian support
practice of economy village level incubator houses are not accepted and the
professional services cannot be provided economically within a village, it
needs at least a micro-regional network.
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9) Although every endangered micro-region has got their governmental, local
governmental or even economic and civil participants who are interested in
improving the rate of employment and within it alleviating long-term unem-
ployment, they can hardly ever co-operate. The ‘micro-regional round table’
launched in Zala county, or any other initiatives of the kind have not ap-
peared yet in the examined region. The multilateral dialogue, which was a
result of the ‘Rapid Response’ programme, broke off after the programme
was over. The ‘round table’ cannot work owing to the lack of people in
charge of continuous organization, or in an even worse case, because there is
disagreement and personal, internal conflicts prove to be an insurmountable
obstacle.
5
A proposal for the development of strategies to alleviate
long-term unemployment
5.1 A new approach to the objectives and priorities of employment
policy
The degree of development of a country is usually measured by GDP per capita.
The quotient of the GDP and the number of population can in fact be interpreted as
the result of the product of multiplication of two quotients.
GDP
GDP
number of the employed
=
x
Population
number of the employed
population
The GDP per one employed person expresses the productivity of the employed,
and the ratio of the employed and the whole population expresses activity. If the
increase in the GDP per capita is regarded as the most important objective of the
economy development programme, then two important consequences have to be
drawn from it. On one hand the maximalization of both factors of the product of
multiplication (both quotients) has to be achieved, on the other hand both indexes
are in close connection with the employment policy, the efficiency and the extent
of the labour market.
Consequently, the objectives of the employment policy are as follows:
1) to increase the productivity of the utilization of labour force,
2) to employ the highest possible number of people
If only efficiency is increased, and meanwhile the proportion of those employed
is decreasing, there will be no rise in the GDP per capita. (Not only in principle,
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but also on the basis of recent experience there may be a situation, where the ex-
pansion of employment has been achieved at the expense of productivity, or just
the opposite: the improvement of productivity is mostly due to the fact that the
groups with low (under the average) productivity have been pushed out of labour
markets, and in this way the number of the employed has been decreased.)
The increase in the rate of employment is affected by the fact that the proportion
of active (theoretically employable) groups within the whole of the population is
decreasing, which in fact is favourable: today people have longer life-expectancy
than they used to and children’s schooling period is also longer than earlier. In the
future these trends are not only expected to continue but to strengthen, too. All this
requires improvement of the employment rates of active age groups, if possible in
the foreseeable future. Consequently a rise in the employment rate can only be
achieved by involving active age groups in the labour market who in principle
could already be employed (on the basis of their age). These groups are typically
the poorest and the socially most disadvantaged groups in Hungary, who have been
pushed out of the labour market for a long time. In general a low level of education
and the lack of any vocational training are typical of them. Among them there is an
especially high proportion of people living in underdeveloped regions and villages,
women, gypsies and mentally or physically handicapped people. The problem is
made all the more serious by the fact that in these groups there are bigger families,
a higher number of children than the average. Thus the possibilities of expanding
employment especially together with the criterion of increasing productivity are in
close connection with alleviating the most serious social problems.
The changes in the rate of activity has a twofold effect on the national budget.
Those who work produce income for the budget by their taxes and contributions. In
the case of those who are pushed out of the labour market any kind of provision
(unemployment benefit, maternity benefit, old age or disability pension, social
benefit, etc.) appears as expenditure in the balance of the budget. These expenses
are further increased by the secondary effects, through which social, health, crimi-
nological or other public expenses are growing.
A higher rate of employment can generally be achieved by integrating such
groups into the labour market. As these groups can be characterized by low labour
market values, an alternative for them can be a low-wage, very often part-time or
other atypical job. In such a situation it may be advisable:
– to raise the minimum wage,
– to support their return to the labour market by different forms of social provi-
sion,
– to use different means to encourage employers to take on groups with a low
degree of education, and low working ability. Most of these means can be
strengthened by raising the value of the minimum wage and by the supervi-
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sion of the extremely high withholding rate of low wages, (e.g. termination of
the one-sum health contribution).
The productivity of labour force utilization is mostly based on knowledge and
can be achieved by an economic strategy concentrating on strengthening and ac-
cepting branches of economy that represent a high technical and technological
level. Only in this way is it possible to take part in the global competition and the
international integration. The labour force of long-term unemployed people in its
present state cannot be utilized in such branches of economy. It has to be taken into
consideration that from the point of view of the short-term objectives of employ-
ment policy, such branches play a negligible role. However, strengthening all
branches of economy that make the appropriate economic environment suitable for
adapting such high-level branches may be of utmost importance. Thus small and
medium enterprises that are able to adapt flexible forms of employment are very
important, especially in the fields of economic services (trade, catering, tourism,
some other financial, representative sales network), human services and care
(household and care services, ‘babysitting’, etc.) construction industry, develop-
ment of communal infrastructure, maintenance and preserving the values of the
landscape, parks and gardens in rural areas. After suitable training, the labour force
of those in the periphery of the labour market could also be utilized in these areas.
A key question of employment strategies is how the long-range objectives of
the productivity and educational level of the labour force and the possibilities of
expanding the employment can be co-ordinated in the foreseeable future (or at least
the effects neutralizing each other can be reduced.) Taking this point of view into
consideration, support has to be granted to the interventions which serve both ob-
jectives at the same time, or which concentrate on achieving one aim while not
reducing the chances of achieving the other one.
Such interventions may be:
a) Making labour markets more dynamic
From the point of view of both long-term objectives and the short-term objec-
tives of expanding employment the most important task is to make labour markets
more dynamic. With this aim in view, the most important areas are as follows:
– Improvement of the comprehensiblity of the labour market.
– Development of information services strengthening comprehensibility for
both those seeking jobs and those seeking labour force.
– Strengthening services connecting and intermediating between existing de-
mands and supplies.
– Broadening the capacities of ‘life-long learning’, especially in the areas of
teaching non-school-like abilities (IT, foreign language, communications,
self-managing abilities, etc.) stimulating mobility, supporting it on regional,
national and international levels, as well.
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b) Upgrading labour force
From the point of view of long-range perspectives, the most important question
is broadening the capacity of education and improving its quality. Upon social po-
litical consideration, besides all this the importance of supplementary programmes,
has to be emphasized, (remedial courses, supplementary services providing social
help (such as e.g. transporting handicapped people, school bus, babysitting, etc.),
grant programmes, student’s hostels, etc). These things give the children of the
people at the periphery of society better chances to take part in the labour market
one day, and they prevent backwardness and exclusion from developing into an
inter-generation problem.
The incentive systems that make employers interested in investments corre-
sponding to the objectives of the employment policy (i.e. in financing and accept-
ing vocational training, or partially meeting the expenses of mobility), can be in-
troduced, mostly through the tax system, in the foreseeable future.
c) Priorities aiming at broadening employment
The dominance of the ‘direct state’ intervention in the employment policy,
which has been typical so far, has to be replaced by the ambition to adapt market
effects. To achieve this change:
– In the case of (especially active) programmes of employment policy, more at-
tention has to be paid to make supported programmes productive in the sense
that they should produce valuable goods and services for some people.
– It is necessary to try to find mutual advantages in the relations developed
with markets and employers and to confirm the contractual forms of co-
operation while taking interests into consideration.
– It is also important to consider the maintainablility of employment when
defining target groups and those involved in any kind of support and the
amount of support. All this also depends on the confirmation of the co-
operation by contracts and by making it vocationally and financially
controllable.
5.2 Changes of content in the trends of the practice and programmes
of financial support
In connection with supports of employment policy it is necessary to lay down the
principles. These principles, which generally seem to be obvious, have to follow,
have to correspond both to the principles of the employment policy of industrial
countries and the trends of transformation in the institutions of the labour market in
EU countries and the points of view of the EU and the ILO laid down in docu-
ments.
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– All forms of support aim to make it possible for more people to find a job in
the labour market, possibly in fields, where taking up a job satisfies the per-
sonal interests of both the person seeking a vacancy, and the entrepreneurial
interests of the employer and the general economic and social public inter-
ests.
– The most essential aim of assistance programmes is to ensure the subsistence
of people who have lost their jobs and who cannot find a new one, for the pe-
riod while they are looking for a vacancy. Expectations of looking for a job
have to be met consistently because the benefit is granted with the purpose of
creating the condition for this activity.
– If it turns out that the person seeking a vacancy does not manage to find one
he must be supported by information service, counselling or some other di-
rect forms of support geared to their needs.
– If such forms of assistance are not sufficient to find the proper job, further,
even ‘more active’ means have to be applied, first of all by supporting the ac-
cess to training and retraining.
– What the active means of non-training have in common is that the user of the
public money granted to him as a support is not generally the beneficiary, i.e.
not the person looking for a job, but typically some kind of entrepreneur, an
employer. Though the utilization of public money in active programmes can
be efficient only when it serves the interests of the employer. Two aspects
have to be taken into consideration while operating the programmes: on the
one hand the person seeking a vacancy and aimed at by the programme
should be the beneficiary of the support , and on the other hand some kind of
a wider social group should be the indirect beneficiary of the support: private
and public consumers, a local community, in a wider sense: ‘the public’.
– The participant of the active programme can become the beneficiary of the
programme only if he thinks he has good prospects, which is realizable only
if the work he does is of good quality, precise and in itself a kind of guaran-
tee that the person will be employed also after the termination of the benefit.
An indispensable pre-condition for this is that the employer should also be
able to employ those doing good quality work after the termination of the
benefit.
– The utility of the public can be realized in the active programmes only if the
programme is ‘productive’ in the sense that the programme will result in
some kind of valuable ‘consumable’ product or service that is attractive for
the consumer.
Though these aspects have been regarded as obvious, they are not real practice
in actual life. To make a progress form this point of view, too, emphasis has to be
changed, especially as far as active programmes are concerned:
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– The social and economic output and the required results of the programmes
have to be emphasized to a greater degree.
– Risks of the expected output have to be shared more proportionally between
the organization granting the money and the entrepreneur using the money.
The supported organization has to take a bigger risk, a responsibility for the
failure of the expected output to a bigger extent, and the decrease in the risks
should influence more the design, target and realization of the programme
(e.g. in the case of investment support and wage subsidy).
– The employer who has not even got potential chances of giving jobs to his
employees after the programme is over, not even to the best ones, must not be
supported at all. With the present financing system of local governments, this
affects the programmes of public utility, public purpose and community
work, too.
– Taking the characteristics of the labour market into consideration, ‘part-time’
possibilities have to be supported, too – part-time jobs, self-employing small
enterprises (or ones employing family members), atypical forms of work, etc.
All the countries with successful employment policy have mostly been able
to make their labour markets more dynamic by supporting part-time jobs.
– While designing these programmes, it is necessary to react to spontaneous la-
bour market developments more efficiently, like e.g. the spreading agency
systems, delivery services, ‘labour force lending’ enterprises.
– Considering the fact that the overwhelming majority of those seeking jobs
have a low working capacity, for whom low-wage, very often part-time em-
ployment is the only alternative, it is necessary to compensate the unfavour-
able fiscal incentives appearing in overtaxing low wages increasingly.
– The introduction of support forms that are spent on the employment costs be-
yond wages can considerably contribute to the improvement of the chances
of employment of the socially most disadvantaged groups, and that of the
situation of villages of the region. (Such costs arise e.g. from local, family
background (mothers with young children) or from activity status (long-term
unemployed people). An important positive feature of the latter programmes
is that they can be well-targeted (determining target groups), embody a well-
balanced interest, because wages have to be paid by the employer, their effect
on the national budget is practically zero, (it is only the costs of paper work
that mean net expenses), as the support gets back to the budget through social
insurance and tax system.
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5.3 Strengthening local employment initiatives
Besides support principles, some further measures are necessary for local employ-
ment programmes to spread and to increase their efficiency:
1) The primary obstacle to strengthen motivation is disagreement and lack of
knowledge. The ‘micro-regional employment round table’ can contribute to
solve both tasks. The ‘round table’ which has continuous talks, offers the
opportunity for the co-operation of the representatives of the labour agency
of the micro-region, local governments, micro-regional associations, eco-
nomic chambers, training institutions, regional civil organizations, people’s
colleges. Their task is to analyze the employment situation, specifying
problems, surveying potential methods of solution, elaborating suggestions
in accordance with these methods, organizing the division of labour between
the represented organizations. Efficient communication between the parties
involved, choice of the suitable means based on consensus, programmes to
handle crises which are elaborated on the basis of obvious regional devel-
opment concepts (Éder, 1996) may lead to a solution.
2) The motivation can be strengthened partly by arousing the interest of local
governments in seeking methods of lasting employment by introducing
forms of support that are granted for a longer period of time, until the enter-
prise becomes strong enough in entrepreneurial areas and partly by intro-
ducing a bonus for finding a job again (Éder, 1996).
3) Each local project is a unique one, is based on local characteristics, so it is
not possible to use the same method everywhere. However, ideas and model
programmes that have been successful in other places are good means of
recognizing possibilities and of working out details. For this purpose the
model projects have to be made well-known. The data bank of local em-
ployment projects supported by the EU is accessible. By translating them
into Hungarian, making a collection of Hungarian model projects and mak-
ing it accessible for local developers may make it easier to take over innova-
tions and to gear them to local characteristics.
4) On the basis of former experience and in order to increase market ability,
special attention has to be paid to:
a) product development – good-quality, unique products based on local
characteristics are needed,
b) the technology – preference has to be given to processes that correspond
to quality regulations but need a high number of people involved in it,
c) good-quality work – the quality of the labour force has to be improved
continuously by applying individual treatment,
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d) the management – to prepare local experts or ensure accessibility of
external expertise,
e) working capital – without which even the best initiative will fail..
5) A good method to achieve market ability may be the support system of incu-
bator houses in villages, which makes it possible to ensure locally: buildings
and technologies corresponding to regulations; technological, training and
marketing expertise used in favour of the activity.
The latter can only be operated with a network of several smaller village
incubator houses that are connected to an incubator house of some small
town. Local people give their labour force and the ‘unique nature’ of the
product, but they are in control of both local resources and the profits com-
ing from the activity. Therefore this solution serves the interests of local de-
velopment much more than the appearance of the premises of external entre-
preneurs.
6) The most important of all innovative solutions is the propagation of the em-
ployment organizational techniques including the survey of local service
demands, the many-sided utilization of labour force and various activities
done for several employers.
7) When settling the legal and financial status of community enterprises that
play a key-role in local employment projects, their characteristics have to be
taken into consideration. Lower wage-like expenses of employees and easier
ways of claiming a refund of the general turnover tax may increase their role
in employment.
8) The national and regional methodological bases of local development have
to be strengthened by supporting existing initiatives. These bases can help
local initiatives by training, information, professional counselling or even by
lending experts for a certain period of time.
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6
Summary – the main statements of the research
6.1 General and regional characteristics of long-term unemployment
1) Long-term unemployment is not only a version of unemployment lasting for a
longer period of time, but it is a qualitatively different category. It implies an
especially strong social danger, because its negative effects form a strengthen-
ing spiral running downwards.
2) Owing to the characteristics of the Hungarian registration systems, the real
trends of the changes in long-term unemployment are not sufficiently reflected
by statistical figures. According to the statistics regarding registered unem-
ployed people there is a decrease in long-term unemployment, but due to the
fact that there is an increasing number of people who have become inactive, or
given up co-operation with the labour organization and therefore have become
unregistered, statistics are not really authentic.
3) We assume that in all probability unemployment is growing, which can be veri-
fied by the following facts:
– there is an increase in the number of the unemployed who are seeking
employment mainly because their inactive or dependent status has ceased,
– there is a decrease in the proportion of those first entering the provision sys-
tem among the registered unemployed people who are not career starters.
4) Among those long-termally unemployed the rate of women is still compara-
tively low but growing dramatically. A higher rate of those having a low degree
of education and that of elderly people is typical.
5) The danger of long-term unemployment is higher in rural areas. It is in close
connection with some other factors of regional development, like the degree of
urbanization, the degree of development of the tertiary sector, the distance of
the centre of the region from Budapest and the Austrian border and the propor-
tion of gypsy population.
6) In the most critical regions more than half of all registered unemployed people
have not found jobs for at least six months. The most long-termally unemployed
people live in the North-Hungarian region, which is the most inflicted by unem-
ployment. Besides the capital city, Gyır-Moson-Sopron, Vas and Zala counties
in Transdanubia and Bács-Kiskun, Csongrád and Békés counties on the Great
Hungarian Plain have the most favourable situation.
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6.2 Foreign methods and experience in alleviating long-term
unemployment
1) To handle employment problems, local employment programmes focusing on
job creation outside the main stream of the labour market have spread consid-
erably. A specified objective of these programmes is to reach the groups pushed
into the periphery of the society and threatened by losing all hope ever to return
to the world of work. To enable them to return to society first of all their
chances of employment, their situation has to be changed. The basic character-
istic feature of such programmes is advancing from the bottom upwards. On one
hand they ensure jobs for socially disadvantageous groups of the labour market,
especially for those long-termally unemployed. On the other hand, the jobs cre-
ated are socially useful, e.g. because they provide low-expense services for
those living in bad financial conditions and for dependents. Furthermore they
help the development of new markets, often on local level, in small quantities.
2) There are three characteristic models in the European countries:
– The English model focusing on the development of market forces
– The German model based on public funds and on the secondary labour mar-
ket, which is basically becoming an independent sector
– The French model, which, in the frame of ‘social economy’ organizes ser-
vices provided for households and individuals to a market
3) In the field of enterprise development emphasis has been placed on the
revitalization programmes based on regional characteristics. From this aspect an
important part is played by:
– operating the local labour market management
– strengthening the local labour market management
– strengthening the local capital market
– developing the conditions for innovative technological surroundings (techno-
logical parks, innovation centres, incubator houses, work from home)
– developing co-operatives
– organizing self-assistance organizations, community enterprises
6.3 Experience in alleviating long-term unemployment in Hungary
1) Most of those long-termally unemployed are socially very disadvantageous
people, which in itself is an obstacle for them to be able to improve their life
conditions on their own. Since finding a new job or becoming an agricultural
small-scale producer or entrepreneur or the strategies of employment after re-
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training are not real alternatives for them, two typical layers have become
dominant:
– a layer in the periphery of society that is reproducing its own disadvanta-
geous situation,
– a group of people which is satisfied with just a hand-to-mouth existence, liv-
ing on casual jobs or household farming and who undertake jobs only suffi-
cient enough to make them entitled to benefits.
2) Of all government means of handling the problem only the operation and effects
of the Labour Market Fund, the National Employment Fund (OFA) and the So-
cial Land Programme have been analysed. The insufficiency of the effect of the
programmes refers to compound reasons and draws the attention to certain
problems of approach.
3) The mere fact that the problem of long-term unemployment has been referred to
the competence of the labour organization has decreased efficiency. To increase
efficiency considerably, far-reaching government measures, mature and more
successful regional development policy, expansive social co-operation and co-
operation between the ministries, and contribution to the development of back-
ward regions, more intensive and efficient assistance to socially disadvanta-
geous layers are needed.
4) Civil organizations and those based on communities can often provide special
services which can satisfy the typical needs of long-term unemployment more
efficiently.
5) Assistance systems themselves involve mistakes, which can be defined by the
concepts ‘unemployment trap’ and ‘poverty trap’. On one hand the different
benefits and forms of social provision are relatively high compared with pay-
ments (in spite of the considerable rise of minimum wages in the past two
years), so they do not stimulate beneficiaries to try to find employment. On the
other hand it may also happen that after covering the expenses in connection
with employment, less income will remain than the amount of the social benefit.
However it is less in both cases than the minimum sum necessary to make a
living.
6) The biggest problem, however, is that most of these programmes do not fit into
the market environment organically. Sometimes there is a mentality or attitude
domineering, which with a kind of anti-market approach, regarded (regards) the
substitution or sometimes simulation of labour markets to be the basic task of
the labour organization. Although by today, especially with the presumably
lasting boom in view, the primary public task has become to support the more
equal opportunity and just accessibility to markets and labour markets. All this
cannot reduce public responsibility for those lagging behind and cannot mean
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giving up those sinking into poverty (and their big families). At the same time
we must take into consideration that it is a more serious and realistic aim to
achieve to support them by improving their chances to participate in the market.
7) Owing to the restricted financial and human resource base of local development,
the employment initiatives of villages and micro-regions are basically deter-
mined by the trends of the government support mentioned in the previous issue
and by the regulations of accessibility. Innovative local and micro-regional ini-
tiatives have been started in connection with first of all NEF (OFA), the social
land programme and various PHARE programmes.
8) Still in their infancy, and not yet known under this name, community enter-
prises have appeared. A part of them originates in the social land programme,
another one, due to the complete lack of local enterprises, is organized as a re-
sult of the economic activity local governments or civil organizations are forced
to do. The compulsion of economic activity originates from the necessity of the
utilization of local resources and from the depressing employment problems.
9) Where there are attempts to apply local employment programmes, they usually
cease to work, are not maintainable after the termination of the support. The
reasons can be traced back to the market inviability of the targeted activities.
They prove to be inviable because they cannot find the market gap, where they
could place their special, unique, good quality products or services. It is partly
caused by the lack of uniqueness of the products, or quality problems or insuffi-
cient marketing expertise, but most often by the lack of the necessary working
capital. The support programmes do not deal with these things either, especially
not with ensuring expertise and working capital after the investment period.
They do not consider the fact that selling small serial local products requires
special expertise, but especially in these regions there are not enough people
having this kind of expertise, or people who wish to apply their expertise in the
non-profit, community sector.
10) Utilization of local resources and maintenance of the projects going on are
hindered by the fact that in the target regions practically everything is missing
that would be necessary for launching an enterprise. There is no capital, but
there is no technological and marketing expertise, no premises or technology
suitable for the purpose, either. Inviting external enterprises that could remedy
this situation could be a solution, but it would involve the danger of losing
control over local resources thus making local people defenceless. The other
possibility could be to ensure the missing factors in ‘incubator houses’ and
following the launched business activity from a professional aspect for a
while. The implementation of this idea is made all the more difficult by the
fact that in the Hungarian support practice of economy village level incubator
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houses are not accepted and the professional services cannot be provided eco-
nomically within a village, it needs at least a micro-regional network.
11) Although every inflicted micro-region has got their governmental, local
governmental or even economic and civil participants who are interested in
improving the rate of employment and within it alleviating long-term unem-
ployment they can hardly ever co-operate. The ‘micro-regional round table’
started in Zala county or any other initiatives of the kind have not appeared yet
in the examined region. The multilateral dialogue, which was a result of the
‘Rapid Response’ programme, broke off after the programme was over.
6.4 Proposals for developing strategies to alleviate long-term
unemployment
1) Objectives and priorities of employment policy have to be reconsidered. A start-
ing point is the fact that GDP per capita as an indicator of the economic devel-
opment of the country depends on the productivity of labour force utilization
and the rate of employment. Increasing the former without the latter does not
lead to the improvement of the indicator. The objectives of employment policy
should therefore be: 1. Increasing the productivity of labour force utilization, 2.
Employing the most possible people. These objectives also include the priorities
accepted and applied in the countries of the European Union (these priorities are
also known and have been declared in Hungary, but they have hardly been im-
plemented or just with a low degree of efficiency) such as improvement of em-
ployability and a diverse and successful development of entrepreneurial skills,
adaptability and equality of opportunity.
2) One of the most important sources of the improvement and reserves of employ-
ment rate may be crowds of people having a low labour market value, which in-
creases the demand for the increase in the degree of education and for low-
wage, often part-time and other atypical jobs.
3) Due to the long-run importance of knowledge-based successful sectors of econ-
omy strengthening economic sectors that contribute to the development of the
suitable economic climate and environment and make them capable of receiving
such successful branches, too, may play an important part in the improvement
of productivity from the point of view of both short- and long-term objectives.
Encouraging unemployed people to enter the labour market again has to be
aimed at in such background branches.
4) As a consequence of all these ideas, support has to be granted to interventions
which serve both objectives at the same time, and which focus on achieving one
76
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
objective without decreasing the chances to achieve the other objective. They
can be as follows:
– making labour markets more dynamic,
– upgrading labour force,
– extension of employment.
5) The EU-conform principles of employment policy has to be implemented in
practice, too. The most important of them is connecting the created jobs to mar-
ketable, maintainable activities.
6) Among local employment initiatives the one aiming at ensuring the conditions
of marketability has to be emphasized. Therefore the quality of the product,
technology, working capital and suitable managerial skills should play an im-
portant part.
7) A good means to provide external help to marketability is to support incubator
houses of rural areas, when the usual incubation activity is done by a well-quali-
fied management on premises in several villages.
8) When settling the legal and financial status of community enterprises which
play a key-role in local employment projects, their characteristics have to be
taken into consideration. Lower wage-like expenses of employees and easier
ways of claiming a refund of the general turnover tax may increase their role in
employment.
9) The ‘micro-regional round table’ may contribute to efficient communications
between the parties involved in solving local employment problems, the choice
of the means based on concensus, the well-qualified project management and
the development of crisis-handling programmes elaborated on the basis of obvi-
ous conceptions of regional development.
10) The national and regional methodological local development has to be
strengthened by supporting existing initiatives. These bases can help local ini-
tiatives by training, information, professional counselling or even by lending
experts for a certain period of time.
77
G. Fekete, Éva : Long-term Unemployment and Its Alleviation in Rural Areas
– Case of Hungary –
Pécs : Centre for Regional Studies, 2005. 80. p. Discussion Papers, No. 47.
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Discussion Papers 2005. No. 47.
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Discussion Papers /Specials
BENKİNÉ LODNER, Dorottya (ed.) (1988): Environmental Control and Policy:
Proceedings of the Hungarian–Polish Seminar in the Theoretical Problems of
Environmental Control and Policy
OROSZ, Éva (ed.) (1988): Spatial Organisation and Regional Development Papers of the
6th Polish–Hungarian geographical Seminar
DURÓ, Annamária (ed.) (1993): Spatial Research and the Social–Political Changes: Papers
of the 7th Polish–Hungarian Seminar
DURÓ, Annamária (ed.) (1999): Spatial Research in Support of the European Integration.
Proceedings of the 11th Polish–Hungarian Geographical Seminar (Mátraháza,
Hungary 17–22 September, 1998)
GÁL, Zoltán (ed.) (2001): Role of the Regions in the Enlarging European Union
HORVÁTH, Gyula (ed.) (2002): Regional Challenges of the Transition in Bulgaria and
Hungary
KOVÁCS, András Donát (ed.) (2004): New Aspects of Regional Transformation and the
Urban-Rural Relationship
BARANYI Béla (ed.) (2005: Hungarian–Romanian and Hungarian–Ukrainian border regions as areas
of co-operation along the external borders of Europe
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No. 1
OROSZ, Éva (1986): Critical Issues in the Development of Hungarian Public
Health with Special Regard to Spatial Differences
No. 2
ENYEDI, György – ZENTAI, Viola (1986): Environmental Policy in Hungary
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HAJDÚ, Zoltán (1987): Administrative Division and Administrative Geography
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SIKOS T., Tamás (1987): Investigations of Social Infrastructure in Rural
Settlements of Borsod County
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HORVÁTH, Gyula (1987): Development of the Regional Management of the
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Long-term Unemployment and Its Alleviation in Rural Areas
No. 9
ENYEDI, György (1990): New Basis for Regional and Urban Policies in East-
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published)
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ENYEDI, György (1998): Transformation in Central European Postsocialist
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HAJDÚ, Zoltán (1998): Changes in the Politico-Geographical Position of Hun-
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Discussion Papers 2005. No. 47.
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