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1

The employment consequences of the 2001 rise in the minimum wage

100%
Kertesi G., Kollo J.
Kozgazdasagi Szemle (Economic Review)
|
2004
|
vol. 51
|
issue 4
293-324
EN
The Hungarian government increased the minimum wage from HUF 25,500 to HUF 40,000 in January 2001. One year later, the wage floor rose further to HUF 50,000. The paper looks at the short-run impact of the first hike on small-firm employment and flows between employment and unemployment. It finds that the hike significantly increased labour costs and reduced employment in the small-firm sector and adversely affected the job-retention and job-finding chances for low-wage workers. While the conditions for a positive employment effect were mostly met in depressed regions, the spatial inequalities were amplified, rather than reduced by the measure.
2

Employment and educational attainment in Hungary.

100%
Kertesi G., Varga J.
Kozgazdasagi Szemle (Economic Review)
|
2005
|
vol. 52
|
issue 7/8
633-662
EN
The study looks at reasons behind the low employment level in Hungary that have to do with educational attainment. The starting point is an international comparison of the educational attainment structure of the population. The comparison is impeded by uncertainties about how to classify certain levels in the Hungarian school system. There are strong substantive reasons for saying that a qualification from a skilled worker or vocational school should be placed in a category lower than the upper secondary level. If that classification is applied, the educational attainment of Hungary's population in 2001 fell significantly short of the average for the EU countries, despite the large scale expansion of education in the 1990s. The still high proportion of ill educated can be attributed mainly to a break in the mid-1980s in a long term trend: the proportion of each cohort attaining a very low level of schooling had been falling steadily since the beginning of the 1970s. The expansion of schooling stopped short at the poor strata. Most of the shortfall in employment derives from the problems with employing labour with low educational attainment: there are too many of them compared with the EU average and they are less employable. Finally, the study draws on earlier evidence and some new arguments to dispel concerns that the excessive education is being provided in Hungary in secondary schools offering a school-leaving certificate and in higher education.
3

Primary-school segregation II. The process of primary-school segregation in Hungary and performance differences between schools.

100%
Kertesi G., Kezdi G.
Kozgazdasagi Szemle (Economic Review)
|
2005
|
vol. 52
|
issue 5
429-447
EN
The paper looks at how segregation mechanisms in the primary school system can aggravate social inequality. School segregation (teaching students with different social background in different schools or different classrooms) can emerge in many ways. It can be initiated by local authorities, but laissez-faire or universal voucher system is also likely to lead to segregation if parents are free to choose schools and schools are free to choose students. There are documented cases of segregation in the first way in Hungary, but the second way is even more important, as the Hungarian primary school system is close to a universal voucher model. Based on economic theory and international evidence, the paper argues that in a segregated environment, children from disadvantaged families are bound to receive education of a lower quality than they would in a more integrated environment. Besides peer effects, lower-quality teaching in classrooms with more disadvantaged students is a necessary consequence if teachers are not compensated for the extra work - as they are not in Hungary. Hungarian data are scarce, but the available evidence suggests that primary schools have become more unequal since 1989, which has led to more unequal student outcomes. Correlation of family background and student outcomes is extremely strong in Hungary, by international comparison. Unequal primary schooling is probably an important factor in creating that correlation. Hungarian primary schools therefore play a significant role in increasing inherited inequality, which is clearly detrimental for efficiency and moral reasons.
4

Expansion of higher education, 'graduate unemployment' and the market value of a degree

100%
Kertesi G., Kollo J.
Kozgazdasagi Szemle (Economic Review)
|
2006
|
vol. 53
|
issue 3
201-225
EN
It is often argued that the expansion of higher education, which has doubled the annual flows of college and university graduates onto the Hungarian labour market, is inevitably conducive to high unemployment among high-skilled youth, and/or a dramatic fall in their returns from higher education. The paper looks at the evolution of the employment, unemployment, and relative wages of graduates from higher education, using data from the Labour Force Survey (1995-2003) and the Wage Survey (1992-2004). The analysis relates to age cohorts across and within occupations, and discusses the possible effects on older and less skilled workers. Young people's returns on higher education increased substantially in 1992-2000, and fell thereafter, especially in the business sector. Workers with a secondary-school background lost jobs and experienced falling relative wages in occupations subject to huge inflows of university graduates. However, the employment ratios were rising and unemployment falling, among university graduates and among less educated workers 'ousted' by them. The results suggest that after a decade of skill upgrading and excess demand for highly skilled youth, the markets are now moving along more or less stable demand curves.
5

Segregation in the primary-school system, I. Causes and consequences.

100%
Kertesi G., Kezdi G.
Kozgazdasagi Szemle (Economic Review)
|
2005
|
vol. 52
|
issue 4
317-355
EN
The paper looks at how segregation mechanisms in the primary school system can aggravate social inequality. School segregation (teaching students with different social background in different schools or different classrooms) can emerge in many ways. It can be initiated by local authorities, but laissez-faire or universal voucher system is also likely to lead to segregation if parents are free to choose schools and schools are free to choose students. There are documented cases of segregation in the first way in Hungary, but the second way is even more important, as the Hungarian primary school system is close to a universal voucher model. Based on economic theory and international evidence, the paper argues that in a segregated environment, children from disadvantaged families are bound to receive education of a lower quality than they would in a more integrated environment. Besides peer effects, lower quality teaching in classrooms with more disadvantaged students is a necessary consequence if teachers are not compensated for the extra work - as they are not in Hungary. Hungarian data are scarce, but the available evidence suggests that primary schools have become more unequal since 1989, which has led to more unequal student outcomes. Correlation of family background and student outcomes is extremely strong in Hungary, by international comparison. Unequal primary schooling is probably an important factor in creating that correlation. Hungarian primary schools therefore play a significant role in increasing inherited inequality, which is clearly detrimental for efficiency and moral reasons.
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