Unemployment Benefits in Hungary

A comparative study using EU-SILC


A PRESENTATION FOR THE BUDAPEST INSTITUTE

By:
Mark Bui, Armine Hakhinyan, Corrado Minardi
School of Public Policy
Central European University

Project Overview

About the Applied Policy Project

About the research

  • Objective: Analyze the 2012 reforms and propose policy alternatives
  • Methodology: Case study and descriptive statistics
  • Results

Case studies

  • Czech Republic
  • Slovakia
  • Latvia

Approach: Literature review and interviews

Major Findings

Eligibility criteria for unemployment benefits across countries

Country Previous employment contribution Other requirements
Hungary 12 months in the previous 3 years Register as unemployed;
actively seek employment
Czech Republic 12 months in the previous 2 years
Slovakia 24 months in the previous 3 yeras
Latvia 12 months in the previous 16 months

Duration and amount of unemployment benefits across countries

Country Duration Amount Ceiling
Hungary 3 months 60% of previous wage 100% of minimum wage
Czech Republic 5-11 months; depending on age 65% to 45% of previous income; decreases throughout unemployment 58% of average wage
Slovakia 6 months 50% of daily average of all contributions made ×2 the average of average wage over the 2 previous years
Latvia 9 months 50% to 65% of average income for base period, depending on working experience; decreases to 50% of this amount throughout unemployment Daily limit of €16.38

Public Expenditure on Job Creation vs Trainings

ALMP Composition in Hungary and EU28
2006-2015

EU-SILC / EUROMOD

Procedure

Limitation

  • Survey data
  • Aggregated data
  • Incompatible formats
  • Lack of data required for simulation

Poverty

Why poverty


Strategy

Difference in Household Poverty Rates
(with & without Unemployment Benefits)

Poverty Rates in Relation to Hungary

Calculated using EU-SILC data on households' equivalized disposable incomes and cross-sectional weights.

Conclusions/
Recommendations

Parametric Reforms

  • Change the calculation and limit of the core unemployment benefits
  • Extend the length of unemployment benefits
  • Progressively decrease disbursement

Paradigmatic Reforms

  • Reduce the scope of public works schemes
  • Match tasks with skills and education
  • Switch to ALMPs

Thank you