Elevator pitch
In the early 2000s, Hungary’s employment rate in the working-age population was below 60%. That is now a distant memory, as labor force participation is among the highest in the EU, unemployment is consistently low, and the purchasing power of wages keeps growing at a high rate. While undoubtedly a success story, it is also a cautionary tale of coerced activation, labor market segmentation, rising inequalities, declining social mobility, and strained employment relations.
Key findings
Strengths
The employment rate in the working-age population increased by 20 percentage points between 2000 and 2024 and is now among the highest in the EU.
The unemployment rate has remained steadily below 5% for a decade.
High labor force participation among older workers and women contributed to the significant extension of individuals’ working life.
Real wages increased by 150% between 2000 and 2024.
Weaknesses
The turnaround in employment was largely achieved through workfare and reduced social assistance that forced many individuals into dead-end jobs.
Despite rising employment, continued labor market segmentation and mismatch afflict low-skilled workers, marginalized groups, and less developed regions.
Already among the highest in the EU, earnings inequality keeps increasing amid declining social safety and mobility.
The gender pay gap remains high and is increasing among high-skilled workers and public employees.
Rigid work organization and reduced worker representation trap many employees into low-quality and low-autonomy jobs.
