Main characteristics of the Hungarian Public Employment Service (H-PES) Tibor Bors Borbély 16 March 2005 FH Kálvária tér

40 ys. of c ircuitous ( ) II.nd. Hungarian Republic 1947 total secularization in the economy –National Plan Bureau (3ys. National Plans, later on 5 ys. Latest was launched in the 80’s) 1950 „county sovjets” 1956 revolution1956 revolution –1957 council on the economy reform 1968 New Economy Mechanism –three main parts: a) more independent firms b) new wage systems in the companies c) renew price system

40 ys. of c ircuitous ( ) II Stop and collapse of the reforms 1973 oil crisis1973 oil crisis 1975 party congress of the Hungarian Socialist and Worker Party first regulation on HR –dept spiral –new policy needed 80’s changing the structure: “to where?” use the company resources for private purposecorporate economic work communities (VGMK) - use the company resources for private purpose –Open way for micro and small enterprises (private cabs, small shops) –1986 two level of bank system –1988 income-tax

The beginning, after the changes Before 1989/90 in middle level, mainly departments on local councils were responsible for labour market and VET National level: Central Wage and Labour Office (ÁBMH) / or Ministry of Labour were responsible for employment –1987 first job assistance subsidies (communal work) were introduced

The beginning, after the changes (II.) National Vocational and Career Centre for career starters (with countrywide branch offices ) worked Just before the political and economic changes „pre-PES” was introduced 1991 Act IV on Job Assistance and Unemployment Benefits- present PES foundation

The present situation - structure of Hungarian PES Between Central Employment Office led the PES directly central office play a coordinating and methodical support function in PES, 2001 National Employment Office (NEO) was founded Structure of Hungarian PES at present days

National Employment Office former graftabl Statement of the Director General 2002 former graftabl Statement of the Director General 2002 a) coordinate the professional activities of PES b) execute the tasks delegated by the Ministry of Employment Policy and Labour of operating the Labour Market Fund, c) coordinate on professional grounds the law enforcement activities of the County (Budapest) Labour Centres, d) develop and operate the unified system of employment registration,

NEO (II.) e) execute the human resources development tasks of the Public Employment Service, with the exception of those of the Labour Development and Training Centres, f) execute the methodological tasks related to providing for unemployment provisions, grants promoting employment and labour market services,

NEO (III.) g) develop and operate the information and communication technology (ICT) systems backing the provision of unemployment benefits, grants promoting employment and labour market services, h) execute the centralized property management tasks of the Public Employment Service, with the exception of those of the Labour Development and Training Centres,

NEO (IV.) i) execute the statistical data processing, analytical and information dissemination tasks based on the registers of the Public Employment Service, j) execute the tasks connected to the preparation and analysis of labour market forecasts and statistics and provide for the dissemination of any information of public interest based on these.

NEO (V.) k) undertake on professional grounds to co- ordinate the official inspection duties of the County (Budapest) Labour Centres l) co-ordinate labour market programmes that involve several counties m) execute any other tasks delegated by the Minister of Employment Policy and Labour New tasks since 1st of May EURES, ESF, etc. Restructuring the PES: PHARE ( ), ESF (2004-) projects

Branch Offices Directly lead by County Labour Offices a) registration of unemployed persons, b) labour exchange, job consulting, career guidance and other tasks, c) establishing, suspending and reclaiming unemployment benefits and job assistance subsidies, d) other tasks assigned to its competence by the director of the labour centre

The Labour Market Fund (LMF) a) to provide assistance to the unemployed, b) to support the unemployed in finding jobs and facilitate adjustments of the work force, c) to promote the social security of employees of economic organisations under liquidation, d) to support the development of the training system, e) to increase the job opportunities available to persons with a changed capacity to work,.

Labour Market Fund (II.) f) to assist in the partial financing of early retirement pension benefits, g) to provide funding for expenses related to the provision of subsidies and benefits financed by the basic sub-fund, and h) to contribute to the financing of the operation and development costs of the public employment service

„ Feeding the employment fund” 90% funded from: Employer's Contributions (3% of gross wage in 2005) Employee's Contributions (1% of gross wage in 2005) Entrepreneurs must pay 4% (since 1st of January 2005) rest 10% vocational training contribution of the firms after 1,5% yearly gross wage approx. 300 billion HUF in 2005 (1,2 billion EURO)

Changing the economy, labour market and PES’s services economic consolidation –1995 Bokros- agenda economic reform growth 2001 searching for a new way... (May 2004 EU full membership) –growth of GDP +4% (compared GE %) (2004)

Unemployment tendencies

Tendencies in employment services 1990/93 Introduce unemployment benefit, dealing with mass unemployment 1995 Career starter program was launched 1996 program for long-term unemployed 1997 First trained employment counsellors appeared in PES service 1998 program for workforce with disabilities 2000’s employment program was introduced, EU standards 2004 I. National Development Plan2004 I. National Development Plan –first Human Development Plan 2004 first Hungarian NAPfE 2004 first use of ESF resources

Job assistance tools Training Assistance Promoting intensive job-seeking Assistance Provided for Unemployed Persons to Become Entrepreneurs Assistance to Employers with the Creation of New Jobs Assistance with Self-Employment Promoting job creation and job preservation Assistance with the Employment of People with a Changed Working Capacity Assistance with Labour Market Programmes

Employability improvement services in Hungarian PES Job Clubs Employment, vocational counselling and psychology Vocational Rehabilitation Centre Vocational and Employment Information Centre (FIT) and „EUROFIT”

Further information Hungarian Central Statistical Office (HCSO) Hungarian National Employment Office Hungary.hu (German, English) Institute of Economics, Hungarian Academy of Sciences Ministry of Employment Policy and Labour (party English version available)