Letting in Hungary’s Poorest: What Does it Take?

Hungary has benefited from rapid income growth over the last two decades. Still, close to one third of its population, and more than 40 percent of children aged 0-17 years remain at risk of poverty or social exclusion, according to Eurostat data for 2014.

The country’s long-term economic growth prospects and living standards are facing the dual challenge of an aging and declining population. With fewer workers entering the labor market and more and more leaving their jobs due to retirement or an old age sustaining long-term growth will depend on ensuring that Hungary’s working age population is well equipped to face this challenge.

Unless people are able to get better skills to make themselves more employable and have better job prospects, the situation is not going to change. For many young Hungarians leaving school today, the reality is that it is not easy to find a job.

The Programme for International Student Assessment (PISA) - an international survey which evaluates education systems worldwide by testing the skills and knowledge of 15-year-old students - sheds sobering light on the chances children from socially disadvantaged background have when it comes to their future job prospects.

The 2012 PISA data demonstrates that these children simply do not obtain the necessary reading and math skills that are needed for jobs in an advanced 21^st century economy. Similarly, Roma jobseekers - who make up an increasing share of new working-age population – have worse chances to get a job, and earn much less than non-Roma. All in all, these challenges demonstrate the clear need for strategic investments in improving the access to human capital development.

But what does this mean in practical terms?

First, prioritizing and closely monitoring investments in social inclusion, such as addressing child poverty, improving school performance, enhancing skills of jobseekers, implementing housing desegregation projects with a geographical focus on areas where the most vulnerable, marginalized and disadvantaged families live.

Second, improving the connection between the national level planning and the local level implementation of activities through a well-defined division of labor and institutional mandates, improved support and mentoring provided for local actors (mayors, social service professionals), and a more effective use of the Local Equal Opportunity Plans.

Third, learning from each other by exchanging good practices on successful interventions in disadvantaged areas, to help identify solutions that work and can be replicated elsewhere in the country.

Fourth, “acting locally” by encouraging communities to identify their own needs and support them in carrying out sound solutions; developing strong partnerships between municipal authorities, community leaders, social workers, and non-governmental organizations to help build mutual trust and ownership.

Three reports produced by the World Bank in the framework of the Promoting Inclusive Growth in Hungary Advisory Services activity – a technical assistance financed by EU funds under the supervision of the Hungarian Ministry of Human Capacities - examine three dimensions of social inclusion in Hungary.

Measuring Inclusive Growth for Enhanced Development Impact is a report that focuses on methods which help assess change and the effectiveness of social investments. It helps evaluate progress on social inclusion of vulnerable populations and establishes the ways to help merge locally available social exclusion data with project information from EU co-funded social inclusion projects to achieve greater effectiveness.

Enabling Inclusive Growth in Hungary discusses how planning social investments at the national level can better support local planning and implementation. The report identifies three constraints which impact the effectiveness of planning and implementation of social inclusion interventions at the local level in the areas of capacity building, community engagement, and financing bottlenecks.

The report also recommends that quality assurance mechanisms, i.e. guarantees that the products and services meet the accepted quality standards, be established to strengthen the role of county-level Equal Opportunity Programs as “equality safeguards” for the use of EU funds. Finally, the report offers ideas on social economy interventions to better address social challenges at the local level in employment, skills gaps, and social services.

A number of case studies from Hungary, and lessons learnt from social inclusion interventions from the Czech Republic, Poland, and Slovakia informed the report by providing valuable insights to address the challenges of inclusion faced by marginalized communities.

For example, Poland’s Social Inclusion Program (SIP) highlights the benefits of effective community mobilization and participation. The Czech Republic’s experience with setting up the Agency for Social Inclusion provides important insights on how to put into operation models and examples of activities which work well in addressing social exclusion challenges.

The case studies from Hungary offer valuable insights into a range of ambitious social inclusion measures that were implemented at the local level, including in the two county towns of Pécs and Békéscsaba, two smaller towns under 10,000 people - Ács and Jászfényszaru, and three villages with high shares of ethnic minorities and located in disadvantaged areas of Porcsalma, Gyulaj, and Alsómocsolád.

The People Behind the Numbers, a handbook for the implementation of local equal opportunity programs in Hungary, offers practical guidance and instruments to empower local stakeholders to shape the local social inclusion landscape more actively and effectively as part of local Equal Opportunity Programs.

The report aims to assist local governments with hands-on advice to address the bottlenecks they encounter in the process of planning and implementing interventions. It focuses on target groups that are experiencing the most complex social exclusion challenges in Hungary, including children from disadvantaged families, unemployed Roma women with children, and the elderly and disabled who live in marginalized communities. The particular situation these target groups are facing calls for a special use of interventions that have been tried, tested, and proven to be effective.

The Handbook includes a comprehensive set of illustrative local social inclusion case studies from all over Hungary, each one of them highlighting the specific target group and the needs that were addressed. It also offers links to over sixty examples of various types of local projects and initiatives, including interventions focusing on education and training, employment, and housing.

Hungary has established a clear and ambitious, yet very complex, approach to social inclusion in its National Social Inclusion Strategy. The three reports provide effective guidance to link planning at the national level with implementation at the local level, based on what has worked in various similar settings.