Active Labour Market Policy Measures for Young Unemployed to Integrate into Labour Market

1. Active Labour Market Policy Measures for Young Unemployed to Integrate into Labour Market Borbély-P., Tibor Bors, Ph.D. Senior Adviser, National Labour Office, Hungary Riga, 21st August, 2013

2. Issues • statistical portrait of the youth in Hungary • different target groups and sub-groups of the young job-seekers • looking beyond 2013: Youth Guarantee– • national YG programme planning • bridging the gap: cooperation with schools • active measures for youth

3. „It is simply hard to tear your eyes away from the slow-motion train wreck that is Europe. Historians will be writing about this moment in time for centuries, and with an ever-present media as we see it unfold before our eyes. And yes, we need to tear our gaze away from Europe and look around at what is happening in the rest of the world. There is about to be an eerily near-simultaneous ending to the quantitative easing by the four major central banks while global growth is slowing down. And so, while the future of Europe is up for grabs, the true danger to global markets and growth may be elsewhere. …” Source: John MauldinIf California Were Greece 05/29/2012

4. Part I. Statistical portrait on youth employment, unemployment & underemployment in Hungary

5. Youth unemployment rate (15-24) among the EU Member States (2011,2012) With absolute numbers 4 MS have more than half of the young unemployed (UK, FR, ES, PL)

6. Youth employment rate (15-24), Hungary vs. EU27 (2002-2012) • Open issues (TBD); • dual-status, dual-training • work-first vs. train-first approaches • changes in school age limits • long-term vs. short-term personal & public good of education • Consumption growth vs. GDP growth vs. new ways of measuring development (e.g. OECD: Better Life Index) • … Eurostat, LFS

7. Employment rate (15-24) by ISCED-levels, HU vs. EU27 2012 Forrás: Eurostat, LFS

8. NEET-rate (15-24) HU vs. EU 27 2008-2012 Forrás: Eurostat, LFS

9. Registered young job-seekers (15-24) * based on the Hungarian Employment Act January- December 2012 NFSZ regiszter

10. Registered job-seekers by ISCED groups, 2012 NFSZ regiszter

11. Part II. Hungarian Practices for youth integration

12. Content • Career guidance • Cooperation with schools • Active measures • National plans for youth guarantee programmes

13. Career guidance • Hungarian PES based on the mandate of the Hungarian ministry responsible for labour has been developing a national lifelong guidance system since 2007. • Since 2010 the current government has been managing the national programme; the current phase has strong emphasise on open vacancies, vocational training & dual system developments • The Berlin Communiqué (3rd July, 2013) on PES actions and youth guarantee programmes highlights the further development of a national vocational counselling structure and a strong link between schools and PES

14. Cooperation with (primary & VET) schools: recent trends • The headoffice of the Hungarian PES was merged with the National Adult & Vocational Education Institute in 2012 • orienting the VET system for the long-term open vacancies; • stipendium for primary school students at grades 7 & 8; • national list (Gov. edict 331/2012 (XI.28.) on sponsored and non-sponsored vocational occupation at county levels

15. Dual training, work practice • The political programme of the current government set up the goal of dual training system development jointly with the Hungarian Chamber of Commerce and Industry; • the new act on VET (2011) describes the 3-year trade school; strong focus on vocational education also allows students from grade 9 (age 15) get engaged in workplace-based apprenticeship agreements.

16. Active measure & programmes (I.) First Job Guarantee • Support for employers hiring registered jobseeking career starters in part-time or full-time employment for maximum 4 months • Entitled: Career starters having not obtained eligibility for jobseekers’ allowance after completing their studies, among them priority is given to unskilled persons and long-term jobseekers. • Amount: 100% of the wage and social contribution tax, plus the refund of travel expenses (prepayment) • Length: 4 months • Financial resources: HUF 3,6 billion (National Employment Fund) • Target: placementof 7000 career starters into the labour market- it has succeded • Application period: 1 September 2012 to 31 December 2012, but it will continue in 2013.

17. Active measure & programmes (II.)Housing allowance for mobility • A new intervention for those jobseekers who, in absence of suitable jobs, are not able to enter employment locally • Target group: jobseekers trying to find employment for at least three months; jobseeking career starters; and employees affected by collective dismissals • Period/Amount of the allowance: 18 months, as a fixed amount calculated degressively every six months (max. 100.000–60.000–40.000Ft/person/month; HUF1,2 Million/person in total) • Conditions: • At least six-month long twenty-hour-per-week employment found at least one hundred kilometres or three hours’ (six hours daily in total) travel by public transport from the person’s domicile • Monthly gross earnings may not exceed 300% of the amount of the minimum wage. • Resources: This measure is financed within EU-funded active labour market programmes under the New Széchenyi Plan.

18. Active measure & programmes (III.)youth entrepreneurship Support stimulating youth entrepreneurship: • Target group: young people aged 18-35 years. • Training opportunity: entrepreneurship education (financial literacy, business plan, marketing, legal environment, etc.); mentoring and counselling. • Financial support: a non-refundable grant of HUF 3 million • A total of HUF 7 billion using EU funds will be available to assist around 1.500 young entrepreneurs in launching their businesses • Trainings start at the beginning of this year, the grant can be applied for after completion of the training. Innovative employment programmes (ÚSZT – HUF 4,7 billion funded by the EU): • Target: developing models of employment programmes. • Priority target group contains career starters and young people having disadvantaged social background or living in undeveloped regions with lacking work opportunities.

19. YGI: Europe

20. YGI: Europe (2) Berlin, High level meeting, 3rd July 2013

21. YGI: Hungary- openissues • PES has ½ of the target group within the registry • Another half of young people are not visible for PES • Services & tools for effective help must be integrated at a horizontal policy level (How?) • How will come first: low skilled (under ISCED 2); long-term unemployed (more than 4 months)

22. Thank you for your attention

23. Some issues for discussion • dual-status (work & school) of the students / youth • dual-training • work-first vs. train-first approaches • changes in school age limits (increasing, decreasing?) • long-term vs. short-term personal & public good of education • Consumption growth vs. GDP growth vs. new ways of measuring development (e.g. OECD: Better Life Index) • PES (PES 2020) as a broker: one access point for services and active measures but does not count as a provider