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Conference on Productivity, Investment in Human Capital and the Challengeof Youth Employment Bergamo (Italy) 13-18 December 2010

Youth Employment in Hungary

An Empirical Study of the Hungarian Situation Balazs Rossu Assistant Research Fellow University of Szeged (Hungary)

Employment Related Problems

Number of registered unemployed in January 2009: 509.907

in August 2010: 546,094 Peak reached: January 2010: more than 650.000

Source in the Past A Trend Born

Major change in the patterns of work and learning: 1989 (Regime change): Number of people employed: Number of students in higher education: 2004: Number of people employed: Number of students in higher education: 5.2015 million 100,868 3.9916 million 378,466

Basic Problems (Background Philosophy):

-Outdated thinking by most of society:

- Education = Well paying jobs - Vocational qualification

Lower salary

- ”Prestigeous” professions are oversupplied  

Intense need for professional (manual) workers

-Inaccurate vision of the labour market and future

salaries; - Low level of mobility;

Labour Market Possibilities

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

- Teachers: In 2004 it was in sync, later there became

an oversupply

- Computer studies: In sync (no accurate data regarding

the private sector)

- Health care: according to the registered unemployed,

not too many aim to work in this sector

- Engineering: 2.5 times more registerd etrants, than those

currently employed (no data on specialised)

Youth Perspective

Factors influencing the expectation of a higher salary:

- Results of studies (in an inverse proportion) - Knowledge of languages (most commonly English) - The institution or faculty and the chosen profession itself - Education of parents (the lower, the lower wage

accepted)

- Internet connection at home (higher if positive)

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

- Gaining work experience during school years - The institution or faculty and the chosen profession itself - Education of parents (affects in reverse

less time is expected to pass) the lower, the

- Knowledge of languages (most commonly English)

(reversed effect)

Effective Support Programs The START-Card:

- Effectively helps entrants to be employed for at least

two (or one for graduates) years (full-time)

- ”Compensates” the employers for the entrants’ lack of

field experience by considerable allowances

- Instead of 27% (of the gross wage) as employers’

contribution and social insurance contribution, the employer only has to pay 10% during the first year, (or first 9 months for graduates) and 20% during the second year (or the last three months for graduates)

The Paid Internship Employment

Main advantages: - regular employment-like conditions; - actual wage-like grants; - participants are insured (in aspect of social security);

- can be combined with the Start Card Scheme;

- tax reduction; - preferential contributions;

-the participant is provided a letter of recommendation

certifying the work experience

Other Possibilities:

- Organization of job fairs and open days by various

institutions

- Operation of informational services and consultation

offices (e.g. In schools) by Employment Centres

-Support of simple needs, e.g. reimbursement of

travelling expenses to promote mobility and widen the range of possibilities for the individual

Conclusion

- Necessary information do not get to people; - Families and society influences the younger generation

based on false or absolete conceptions and values;

- There is not enough focus on practical and manual

training in education;

- Supply and demand do not match on the labour market; - Flaws of the current system should be mended; - Thinking in general should be modernized

THANK YOU FOR YOUR KIND ATTENTION!