How is it possible that almost 1 million people do not work in Hungary?

In Hungary, almost a tenth of the population is economically inactive, which means that 900,000 Hungarians are outside of the labour market. This proportion is quite significant compared to the EU average, but what is the reason behind it, and which gender is most affected?

According to the latest Eurostat report, the percentage of the total working-age population (aged 15-64) shows a declining trend in the labour market of the European Union. During the last decade, the proportion of economically active people has declined by almost 6% in the EU; however, a slight increase could be observed last year when it increased by 0.5 percentage points, resulting in 27.1% in 2020.

As the Hungarian news portal Pénzcentrum reports,

the statistics consider all people of working age who are neither employed nor unemployed to be outside the labour market.

This includes all the people who are not available in the world of work for various reasons, including studying, caring for a family member, a retired status, or being unable to work due to an illness or disability.

Based on last year’s data, Eurostat has made a ranking of the countries considering the proportion of economically inactive people, according to which Italy had the largest number of people outside the world of work. Numerically, this means 35.9% of the population. The Mediterranean country was followed by Croatia in the second and Greece in the third place where the proportion of economically inactive people is 32.9% and 32.6% respectively. The non-labour market share was also high in Belgium and Romania, exceeding 30%.

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Hungary is in the midfield of the ranking, meaning that 27.2% of the working-age group did not work in 2020.

This is approximately 900,000 people of the total population of 15-64-year-olds.

The good news is that the declining trend of economic inactivity in the EU can also be observed in Hungary, where this proportion has decreased by almost 11% in the last decade. Despite the promising tendency, Hungary is still above the EU average in terms of economic inactivity.

In terms of gender ratio, the proportion of women outside the labour market is more significant than that of men,

a trend which can be observed since the beginning of the Eurostat time series. However, the gender gap has narrowed during the last two decades. Accordingly, the indicator has reached its lowest point last year. Still, the difference is remarkable in Hungary.

In 2020, 19.7% of men of working age were economically inactive, while 34.7% of women were outside the labour market.

So, the difference is a total of 15 percentage points, which is much higher than the EU average.

According to the Eurostat ranking, the best situation can be observed in Sweden, where only 17.5% of the population are economically inactive. The Netherlands can also be proud of its positive results, as only 19.1% of the population is outside of the labour market.

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Source: penzcentrum.hu, portfolio.hu