In Hungary, regional unemployment disparities first emerged during the late 1980s, when the socialist government, in the course of market-oriented reforms, did – in certain circumstances – allow redundancies. As these lay-offs took place in very few places, especially in the north-east, while full employment was maintained in the rest of the country, these early redundancies led to extreme unemployment disparities, al-though the national unemployment rate remained very low. The initially strong disparities eased in the early stage of transformation, when unemployment rose throughout the country. This is expressed by the falling quotient of the maximum and minimum unemployment rate in the first years of transformation. Since then, regional unemployment disparities have manifested themselves at a relatively high level. The ranking of the 20 Hungarian counties by their unemployment rates has not changed much since 1990. Budapest has always experienced the lowest unemploy- ment rate while the county Szabolcs-Szatmár-Bereg has always faced the highest rate (except in 1993 when unemployment was highest in Borsod-Abaúj-Zemplén). Therefore can be regarded as providing a general pattern for regional unemployment disparities in Hungary since the beginning of the transformation period. Unemployment rates are lowest in and around Budapest (Central region) and in the counties bordering Austria (West region), while the highest unemployment rates have emerged in the North-East region (Nógrád, Borsod-Abaúj- Zemplén, Szabolcs-Szatmár-Bereg). The regions are created out of two or three counties that have experienced similar unemployment rates since 1990.