Because I know that the highest unemployment can be found in the group with the lowest educational attainment I figured that the problem in Hungary was that there were too many people with inadequate education, which nowadays means less than twelve years of schooling. It turned out that I was wrong–if, that is, we can believe comparative sociological studies.
On March 10 the Táncsics Foundation of MSZP, which is headed by Ferenc Gyurcsány, held a conference where three scholars gave lectures on their fields of expertise. One talked about economics, another about the future of pensions and retirement and the third, and this is what I would like to focus on here, about the low rate of employment and its causes.
It was Balázs Krémer, a sociologist, who gave a very interesting lecture on the connection between employment and educational attainment. Every time we talk about low employment figures two problems crop up. One is the very high number of people who receive disability payments and the other is the connection between low educational attainment and unemployment.
Let's start with the problem of "disability pensions" (rokkantsági nyugdíj). The number of people receiving such pensions is truly staggering: 11-12% of the population between the ages of sixteen and sixty-four. Clearly it is impossible to have so many disabled people in a European society. The major reason for this staggering number was a mistaken government reaction to the unemployment crisis that occurred right after the change of regime. The Antall government decided to shove a great number of unemployed people into the category of disabled after their unemployment insurance ran out. Lately it is much more difficult to get disability payments, but only a few days ago the authorities found a number of doctors who for a fairly hefty sum were ready to declare people with no qualifying medical condition disabled.
Seventy some percent of Hungarians are convinced that most people on disability are robust and healthy people who just don't want to work and fake their illnesses. However, a large number of those who received disability status twenty years ago are close to retirement age by now and thus are most likely not fit to work, especially after such a hiatus in their employment. The Orbán government's somewhat rash announcements about a serious curtailment of disability benefits most likely would affect only about 100,000 people. The question is what to do with these people after their disability payments come to an end. The simple answer is: they should go out and work. But where? There are about 600,000 unemployed people at the moment in Hungary.
Krémer at this point moves on to the low rate of employment in the age group between 16 and 64. Most of the "inactive" people come from the group with low educational attainment. The employment rate of people with college degrees is about the same in Hungary as elsewhere in Europe. But among those who didn't finish high school the rate of employment is dismal. The next question Krémer tries to answer is whether the generally low rate of employment is due to an unusually high number of people who don't have at least twelve years of education. But that doesn't seem to be the case. Just to give an example, the educational attainment of Portugal is really low: 69% of the population didn't finish high school. But in Hungary it is only 24% of the population. Hungarian statistics are also good when it comes to the number of years completed in an educational facility. Here again, within the European Union Hungary is above average.
Krémer then looks at the actual knowledge acquired in Hungarian schools and, although we know that Hungary is no Finland or Korea, according to the PISA tests Hungarian children at the age of fifteen are above average in Europe. They are better than children in Luxembourg or Austria.
So, asks Krémer, what is the problem then? Perhaps in the developed countries there is no need for workers with low educational attainment. Perhaps the Hungarian economy developed too fast. No, exactly the opposite is true. He found that in countries with higher GDPs the rate of employment of the group with lower educational attainment is actually higher than it is in those with lower GDPs.
So, says Krémer, we must consider the possibility that the problem is on the supply side. And he found important clues in the inflexibility of the workforce and the absence of life-long learning. The Organization for Economic Co-operation and Development (OECD) considers any form of adult learning over and above of normal schooling, from preparing to be a hairdresser to studying a foreign language, "continuing education." The statisticians of the OECD looked at the group between ages of 25 and 64 and found that the European average was 41%. So, almost every second adult was learning something in his spare time or in between periods of employment. The Swedes headed the list with 73% while the penultimate country was Greece. And which country was the very last? Hungary, with 9%!
Krémer thinks that adult education is a sign of wanting to get ahead. Where people have higher ambitions they are more likely to take the initiative and engage in some kind of activity that gives them an edge. Krémer thinks that in Protestant countries this tendency is stronger than in Catholic countries (that good old Protestant work ethic). At the bottom are countries of Orthodox Christianity. Interestingly, Hungary, which in spite of the presence of a fairly large Protestant minority is basically a Catholic country, in this respect ranks among the countries where the Orthodox faith is prevalent: Greece, Romania, Bulgaria.
So, continues Krémer, the problem has its origin in cultural heritage. People in Hungary are not ambitious enough. They are satisfied with their lot. Their current lot is their fate. Nothing can be done about it. They don't work too hard in school, they don't kill themselves to find a job or establish a business.
This sounds very harsh and I'll bet that a lot of people would consider these findings unfair and demeaning. But I must say that I have heard so many stories about a lack of initiative even among the highly educated that I'm not entirely surprised by Krémer's findings.