Hungary

According to recent Hungarian Statistics, Hungary is experiencing a significant share of skilled emigration. About 13% of skilled migrants from Hungary are residing in another OECD country in 2000 (Szemely/Csanady 2010: 32). The traditional migration destinations are Austria and Germany – skilled and semi-skilled Hungarian workers come to those countries. More recently, qualified Hungarians migrate also to new destinations, e.g. UK and other EU 15 countries, were they often take jobs for which they are overqualified (see Hars 2010). Research for the period of 2008-2009 shows that 3/4 of all Hungarian emigrants are men (Hars 2010: 3). Previous research also proved the circular character of Hungarian emigration; most emigrants from Hungary prefer several shorter periods of labour migration in the destination country (Hars 2010: 3).

Hungary is experiencing a significant share of return migration as well. These return migrants are either motivated by their desire to retire in their home country or they want to make use of new opportunities accorded by Hungary’s transition to a market economy (Co et al. 2000). Return migration is the strongest from the new destination countries (Hars 2010: 8).

The share of Hungarian returnees increased during the crisis, while emigration was increasing as well (Hars 2010:5). According to HU LFS Data, ‘the most successful returnees seem to be those who had non-manual jobs abroad. They hardly experience a period without work following employment abroad. Returnees with lower education are more likely without a job; but in the period of the crisis the difference became smaller’ (Hars 2010: 6, 7).

Martin/Radu (2011) compared Hungarian returnees with non-migrants with respect to observable characteristics such as education and age using the Labour Force Survey 2002-2007. They show that at the time of return, returnees are younger and better educated than non-migrants. In addition, returnees are more likely not to participate in the labour market or to switch into self-employment than non-migrants (Martin/Radu 2011: 14). Potential explanations for this finding suggest that a lack of human and social capital on the local labour market may be responsible, or returnees may just search longer for a job and aim ‘higher’ than non-migrants due to their savings from abroad. Martin/Radu (2011) also show that returnees receive significant income premia both from self-employment and from dependent employment (Martin/Radu 2011: 14).

Research by Co et al. (2000) on return migration in Hungary shows rather different results. They use data from the Hungarian Household Panel Survey (1993 and 1994) and come up with a sample of 3145 people in working age, out of which 167 were returnees (Co et al. 2000: 59). Using different econometric estimation techniques and controlling for self-selection into migration and return, they consistently find that there is no wage premium for male returnees; on the contrary, female returnees who have been to OECD countries earn a 67% premium over those who have not been abroad (Co et al. 2000: 71). According to the authors this can be explained by the following two factors: ‘First, there is a clear dichotomy in the types of industry men and women enter. The results suggest that the types of industries men enter (e.g. heavy industries and construction) do not offer any wage premium for foreign experience; while the industries women enter are exactly those industries where foreign experience matters (e.g. financial services). Second, say there is wage premium to having gone abroad, the insignificant abroad coefficient for men suggests that ‘lost contact through having gone abroad may have resulted in lower wages’ (Co et al. 2000: 71). Hence, the high income premia for women result from the skills acquired abroad which are valued in specific industries of the local labour market and the possible undergoing of wage cuts which experienced women who have not been abroad during the transition phase (see Co et al. 2000: 71). In order to assess the return potential among migrants, Személyi/Csanády (2011) use a snowball-sampling approach to survey skilled Hungarians living and working outside their country of origin. To sum up the main results, the authors found that ‘return is more likely if the respondent owns property in Hungary, emigrated no sooner than 5 years before taking the survey and does not work in the education/research sector’ (Személyi/Csanády 2011: 44).

The main push factors responsible for leaving Hungary were income aspects, professional development/career opportunities and the overall political situation. ‘Current emigrants are also pushed by the limited job market in Hungary for professionals in the natural and technical sciences, especially in R&D’ (Személyi/Csanády 2011: 44).

Concerning their current situation, Hungarians are in general more satisfied with their job in the destination country than with their last job in Hungary (Személyi/Csanády 2011: 38).
‘In their last job in Hungary they earned (corrected for an average yearly salary increase in Hungary since the year they left) typically between net 1.5 million and 3.5 million HUF (around $9-20,000) per annum, while currently their salary is between 6 and 16 million HUF (around $35-90,000). This means that they earn an average of 4 times the money they would earn if they had stayed’ (Személyi/Csanády 2011: 39). Despite these income advantages, migrants only send to Hungarian family members a few percent of their current income (Személyi/Csanády 2011: 39).
With respect to contact to Hungarians the authors found that ‘regardless of years spent abroad most of them (migrants) maintained at least 6 contacts. It is worthwhile to mention that half of them also often meet Hungarians in their current country of residence. Talking about other connections, one in six is a member of a Hungarian professional institution in Hungary and only 5% are members of a cultural one. If we compare it to such relations in the current country we find the ratios of 15% and 50%, respectively. It seems common in this group that professional relations to Hungarian institutions in the country of residence and in the source country are equally important’ (Személyi/Csanády 2011: 42).

Asked about their future plans ‘40% answered yes to the question of returning to Hungary, though one third of them only after 10 years. 30% were unsure, a further 30% said no” (Személyi/Csanády 2011: 39-40).

The authors of this study conclude that ‘the results suggest that as long as the mentioned differences do not decrease significantly, return migration will be moderate. So will the emigration continue while these differences prevail.’ (Személyi/Csanády 2011: 44)

Literature:
Co, C.; Gang, I.; Yun, M. (2000): Returns to returning. Journal of Population Economics 13: 57-79.
Hárs, A. (2010): Return Migration. The case of Hungary. Presentation at the European Job Mobility Day, Brussels, 16th Nov 2010.
Martin, R. And D. Radu (2011) Return Migration: The Experience of Eastern Europe, International Migration (forthcoming).
Személyi, L and Csanády, M. (2011): Some Sociological Aspects of Skilled Migration from Hungary. Social Analysis, 1, 1: 27-46.

Central Transdanubia is bigger than the other regions with a population of more than 1.1 Mio inhabitants; the number of inhabitants was quite stable over the last decade. Nevertheless, the region is confronted with an aging population. There is a decrease for the -15 by more than 1.1 percentage points and an increase of 1.2 percentage points for the 65+. Net migration was slightly positive at 1.95. The level of education is relatively high with 46.2% possessing upper secondary/non tertiary education and 19.2% having tertiary education. The report points to deficits in the education system’s capability to cope with the fast changing labour market, attributable to a lack of collaboration, harmonisation and consistency. The number of institutes offering higher education is only seven in the region.

Geographically the region is connected to major European development zones (Prague-Vienna-Bratislava-Györ-Budapest, and Venice-Trieste-Ljubljana-Budapest). GDP per capita is only 8,418 Euro. The region itself shows different development data for the micro regions. Important for regional development is the existence of two growth centres (Szekesfehervar and Veszprem) as well as two minor centres (Tatabanya, Dunaujvaros), having a fundamental role in employment, education and research.

Employment is concentrated predominantly on the secondary sector (59%). The tertiary and quaternary sectors are underrepresented with 28.6 and 8.6%, respectively. Tourism is stated as a key economic sector, though this contrasts with the data on its employment level. Labour force participation is low, especially in the age group 45-64 with only 53%, but according to the report, nonetheless substantially higher than the national average. There is no direct policy at national level addressing remigration, but the overall employment strategy as laid down in the New Szechenyi Development Plan is also touching issues of brain drain. Also on regional level there are no specific measures, but some initiatives take account of returnees; e.g. business opportunities for returnees are specifically supported, and measures to better co-ordinate economy and training should also support skilled returnees to better link to the home community. An initiative to attract a very limited number of researchers is funded by the Hungarian Academy of sciences. A second programme is offering young (mostly would-be) entrepreneurs fellowship to get international experience and return to Hungary along with supporting them to implement their own business in Hungary.

Central Transdanubia is bigger than the other regions with a population of more than 1.1 Mio which was more or less stable over the last decade. The region is nonetheless confronted with an aging trend. Figures are quoted in different age brackets, but show a minus for the -15 by more than 1.1 percentage points and an increase of 1.2 percentage points for the 65+. This is not different from national average, and the proximity of the capital Budapest might be an underlying factor here. Net migration was slightly positive at 1.95. Education levels are high with 46.2 for upper secondary/non tertiary and 19.2 for tertiary education. The report points to deficits in the education system’s capability to cope with the fast changing labour market, attributable to lack of collaboration, harmonisation and consistency. The number of institutes offering higher education is only seven in the region.

Geographically the region is connected to tow major European development zones (Prague-Vienna-Bratislava-Györ-Budapest, and Venice-Trieste-Ljubljana-Budapest). GDP per capita is only 8,418. The region itself shows different development data for the micro regions. Important for regional development is the existence of 2 growth centres (Szekesfehervar and Veszprem) as well as two minor centres (Tatabanya, Dunaujvaros), having a fundamental role in employment, education and research.

Employment is concentrated on the secondary sector predominant with almost 59%. The tertiary and quaternary sectors are underrepresented with 28.6 and 8.6%, respectively. Tourism is stated as key economic sector, though this contrasts with the data on its employment level. Labour force participation is low, especially in the age group 45-64 with only 53%, but according to the report, nonetheless substantially higher than national average.

There is no direct policy at national level addressing remigration, but the overall employment strategy as laid down in the New Szechenyi Development Plan is also touching issues of brain drain. Also on regional level there are no specific measures, but some initiatives take account of returnees; e.g. business opportunities for returnees are specifically supported, and measures to better co-ordinate economy and training should also support skilled returnees to better link to the home community. An initiative to attract a very limited number of researchers is funded by the Hungarian Academy of sciences. A second programme is offering young (mostly would-be) entrepreneurs fellowship to get international experience and return to Hungary along with supporting them to implement their own business in Hungary.

Share of nationals and non-nationals among immigrants, 2009, data source: EUROSTAT, own calculations

Age structure of recent returnees (1 year upon their arrival) and stayers in LFS 2005-2008, weighted data

Recent returnees (1 year upon their arrival) according to gender, in %, LFS 2008-2008, weighted data

Educational attainment of recent returnees (1 year upon their arrival), aged 17-62, compared to that of stayers, LFS 2005-2008, weighted data

Labour market status of recent returnees (1 year upon arrival), aged 17-62, compared that of stayers, LFS 2005-2008, weighted data

Occupations of recent returnees (1 years upon arrival), aged 17-62, compared to those of stayers, LFS 2005-2008, weighted data

Recent returnees (1 year upon arrival), aged 17-62, and stayers according to sectors of employment, LFS 2005-2008, weighted data

Recent returnees (1 year upon arrival), aged 17-62, and stayers according to the area of residence, LFS 2005-2008, weighted data

Mid-Pannon Regional Development Company
Zichy liget 12
8000 Székesfehérvár

Tamás Kovács
Phone: +36-22-500-268
E-mail: kovacs.tamas@kprf.hu