Transcript Targeted national labour market programmes on youth

LABOUR MARKET PROGRAMMES ON
YOUTH EMPLOYMENT IN HUNGARY
"Productivity, Investment in Human Capital and the Challenge of Youth Employment”
Comparative Developments and Global Responses”
Bergamo (Italy), 16-17 December 2010
Attila Kun Ph.D.
Associate Professor, Deputy Head of Department
Károli Gáspár University, Budapest, Hungary
Faculty of Law, Department of Labour Law and Social Security
E-mail: [email protected]
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The labour market situation of the 15-24years age group Employment rates
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continuously decreasing employment
compared to 2000, employment rates among youth
decreased in most EU MSs - the most significant
decrease was in Hungary: the overall youth
employment rate dropped by almost 14 %
33.5% (2000) → 20% (2008)
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almost 80% of this age group is inactive
NEET-rate: only slightly below 20% (7. worst rate
in EU-27)
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The labour market situation of the 15-24years age group Unemployment rates
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increasing unemployment
strong rise in the youth
unemployment
rate
between 2000 and 2006,
but it is still not
considerably far from EU
average
2006: 19,1 %
2007: 18 %
2008: 19,9%
Young unemployed by
educational level
40%
Loweducated
18%
Vocational
education
33,7%
Middleeducated
8,3 %
Graduates
(among all
unemployed:
4,6%)!
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Targeted labour market policies
PASSIVE BENEFITS
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1991 (Employment Act): schoolleavers unemployment benefit
- till 1996
Currently:
no
specifically
targeted passive benefits
ACTIVE MEASURES
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Until 1993: no real targeted active
measures
1993- more and more active
measures (e.g. „Give a chance”)
1996: new targeted ALMPs (workexperience scheme, employment
subsidy)
2005-2007: paradigm-shift, reforms
 2005-: START-Programme
 2007-:
modernisation,
simplification, flexibilisation of
wage
subsidies,
training,
prevention etc.
2009: reintroduction of the workexperience scheme
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START-Programme
(valid from Oct. 2005)
PURPOSES
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helping young persons to enter the labour market
(‘stepping stone’),
increasing employment opportunities in the target group,
making it easier to hire young people and encouraging
employers to recruit young workers,
creating incentives for employers to follow employment
regulations and employ workers lawfully
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START-Programme
Main features
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UNIVERSAL, TRANSPARENT COVERAGE
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all young entrants of the labour market (career starters with
secondary education under 25 or with tertiary education under 30)
who finished (or interrupted) their studies and
who take up regular employment for the very first time.
EASILY ACCESSIBLE
Jobseekers themselves can apply for the START-CARD which they present to
employers when applying for jobs.
 Free of charge
 Administration: National Tax Authority
 Valid for 2 years (1 year for university graduates)
 It can be applied for only once
 May be used by more employer
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START-Programme
Main features
Social security
contributions paid by the
employer
‘BUSINESS-FRIENDLY’:
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Universal reduction on social
security contributions
up to a certain wage limit:
 Generally: 150% of the
minimum wage,
 University graduates: 200% of
the minimum wage
for a 2-year period (university
graduates: 1 year)
no obligation to maintain
employment after the termination
of the subsidy
→ CONSIDERABLE SAVINGS by
employers (approx. 1200-1800
EUR/year)
START
General
First year
(university
graduates:
1.-9. months)
10%
27%
Second year
(uni.
graduates:
10.-12.
months)
20%
27%
Additionally, employers are exempt
from the monthly fixed-sum health
care contribution for the whole period7
START-Programme
Main features
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‘WIN-WIN’ SITUATION
BUSINESS: Savings on labour costs
 YOUTH: ‘Stepping stone’, opportunities
 STATE:
new model of CSR (Corporate Social
Responsibility)-related public policy / regulation:
≈ The public goal (i. e. youth employment) is in fact
implemented (semi-voluntarily) by businesses as a
positive externality, backed by the „enabling” /
facilitating policy of the state.
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START-Programme
Main features
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THE SCHEME IS POPULAR, SUCCESSFUL, WELLKNOWN
Between Oct. 2005 and Feb. 2009, more than one hundred thousand
(116,033) Start Cards were issued (from which 32,223 were issued for
young people with tertiary education).
Approx. 15% of firms avail of the possibility to employ school leavers with
a Start Card.
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MODEL-VALUE
From July, 2007 new schemes were added to the expanded ‘START FAMILY ‘
 START Plus: for parents who received or receive child care allowance and
want to return to the labour market
 START Extra: for long-term, especially disadvantaged jobseekers (e.g.:
older than 50 years of age, living in the most disadvantaged micro-regions)
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Paid Internship Employment
Originally introduced in 2004 as a specific stipendium or
stagier programme.
 GOAL: to help young graduates of tertiary education to
gain work experience under regular employment-like
conditions (a specific form of employment).
 POTENTIAL BENEFICIARIES:
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young graduates (up to the age of 30)
with college and university degrees (obtained in the preceding 2
years)
DURATION: min. 9 months, max. 12 months. It can be
concluded only once, for definite period.
The minimum amount of the GRANT is defined by law.
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Paid Internship Employment
ADVANTAGES FOR
EMPLOYERS:
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Backed by tax-incentives.
Can be combined with the
START-Card.
Possibility to recruit and train
talented young people.
Uptake: Although it is also
extended to the private sphere,
it is much more popular in
public administration (central
administration
bodies
can
recruit new civil servants from a
wider pool of talented young
people).
ADVANTAGES FOR
EMPLOYEES:
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From the point of view of social
security,
participants
are
considered insured.
Smooth
career-start,
work
experience, shortened transition
between education and working
life.
Guidance by a professional
“mentor” (according to a predefined
individual
work
experience-plan)
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SOME CONCLUSIONS
Successful integration of youth into the labour market
depends, for a big part, on the countries’ overall labour
market performance.
The unfavourable development of the Hungarian labour
market has had effects in two opposite directions: “on the
one hand it weakens the motivation of those with lower
school performance to continue in education and to gain
qualifications; on the other hand more and more stay on in
education without following specific career perspectives.”
(Youth Policy in Hungary, Report of the Council of Europe international review team, February 2008.)
→ The mismatch between labour market needs and actual
skills is deeply structural in Hungary.
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SOME CONCLUSIONS
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Even if we have some notable, innovative targeted measures (like the
Start Programme), the overall labour market performance of the
country does not allow us to be optimistic.
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Labour market policies in themselves can only have a limited
impact.
New policies, such as VET-modernisation, reform in education,
non-formal learning, lifelong learning etc. are still more
programmatic than implemented or effective.
Policies must be cross-sectoral and can not be successful without
harmonising the complex interests of all related stakeholders (society /
public policy; businesses, young workers etc.).
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Thank you for your attention!
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