Participation, employment, unemployment in the Hungarian market

A low participation rate is still the main characteristic of the Hungarian labour market. Of the 7,719 thousand people in the 15–74 year old age cohort 4,238 thousand were active in 2007 which corresponds to a 54.9 per cent participation rate. The participation rate of men in 2007 was 62.5 and the participation rate of women was 48 per cent.

During 2005/2006 there was a minor 0.6 percentage points increase in the participation rate which was partly due to the increase in the number of employed persons. From the befinning of 2006 to the end of 2007 the participation rate decreased by 0.1 percentage points. The number of employed persons increased by 29 thousand in 2006 and decreased by 4 thousand in 2007. The employment rate of men was 58 per cent in 2007 and 48 per cent for women. The Hungarian activity and employment rate are both still very low if we compare them internationally. In 2006 the activity rate of 15–64 yearolds lagged behind the EU15 average by 8.7, the EU19 average by 7.7 and the OECD average by 5.3 percentage points. The corresponding fallback in the employment rate was 7. 3, 6.1 and 5.6 percentage points. In 2006 the number of unemployed persons was about 13 thousand higher than in the previous year, the rate of unemployment also increased by 0.3 percentage points. The increase in the unemployment rate was 1.1 percentage points. In 2007 the number of unemployed remained at 164 thousand with unemployment rate decreasing from 7.2 to 7.1 per cent. Despite the rising trend in the unemployment level the Hungarian unemployment rate is still moderate compared internationally. In 2006 the unemployment rate of the 15–64 year old group was 0.9 percentage points lower than the EU15 average, 1.5 percentage points lower than the EU19 average and 1.3 labour market trends percentage points higher than the OECD average. Nevertheless the relatively low unemployment rates are partly due to the abandonment of job search by the non-employed which was facilitated by the welfare system.

Disability pensions and a variety of early retirement schemes absorbed a large proportion of those individuals leaving the labour force. In the 45 to 60 age group over 40 per cent of the non-employed receive disability benefit.

The generous family support system, primarily the maternity leave options, have an important impact in the participation rates of women. Women’s inactivity rates are more than 80 per cent for households with at least one child aged below three years.

The duration of unemployment in Hungary is lengthy. In 2006 only 4.3 per cent of the unemployed succeeded in finding a job within 1 month following their job loss. In 2007 this share was somewhat larger and 4.5 per cent of the unemployed found employment within 1 month. But the proportion of those looking for a job for more than one year increased between 2006 and 2007 from 41.2 per cent to 44.1 per cent.

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