Hungary: Labour market success of young skilled workers

A Hungarian research report surveyed 10,104 graduates of vocational training and assessed their labour market success nine months after they completed vocational education. The survey analyses factors such as age, gender and family background and concludes that good learning skills and general knowledge play a crucial role in helping young people enter the labour market.

Background

During the past three years, Hungary’s vocational training system has been comprehensively overhauled in response to long-standing complaints from employers that vocational graduates did not have adequate knowledge, skills and competencies. The reforms were also intended to tackle high drop-out rates and improve the low prestige of vocational education.

The core element of the changes is the gradual introduction of the dual system, which means that companies are becoming increasingly involved in practical training. Vocational education will become a three-year programme that follows on from primary and lower secondary-level education, and will be less theoretical and more job-oriented. The reform was inspired by countries with a strong apprenticeship tradition, such as Germany.

The factors that affect skilled entrants’ chances of finding a job and their unemployment risk and determine whether they will take up further studies have been examined by a study, Labour market situation of young skilled workers and their chances of getting a job (in Hungarian, 2 MB PDF), published in February 2014. The survey research was carried out by the Institute for Economic and Enterprise Research (GVI).

Main research questions and methodology

The survey focused on skilled graduates, assessing their status on the labour market nine months after the completion of their vocational education. It examined whether they had been able to enter the labour market, whether they intended to take up a job at all, or whether they had opted for continued study. The aim was to identify the main factors that affect labour market entry, the choice of further study or increase the chances of unemployment.

The study was carried out between 2009 and 2012, and 10,104 skilled graduates of vocational education completed the research questionnaire. The sample was selected from graduates who had:

  • trained in ‘supported’ occupations (those for which anticipated labour demand is higher than training enrolment quotas; this made it possible to ensure the study avoided the selection bias of labour market demand);
  • served an apprenticeship of some length at a host company.

The sample reflected the distribution of graduates by supported occupations and regions. The questionnaire asked questions about age, gender, family background, scholastic record, labour market position, workplace characteristics, wages, intention to study further and opinions about vocational education and training and the workplace.

The report first presents the labour market position of skilled graduates, whether they have a job, are unemployed or are pursuing further studies. It then analyses the factors that have influenced these outcomes. Multi-variable logistic regression models with a wide range of explanatory variables were used to identify the most closely correlated factors.

Chances of finding a job

Nine months after finishing vocational education, less than half of the young graduates had work – a job, working as an entrepreneur, or self-employed. Broken down by the four years during which the survey was carried out, the proportion who had work were: 2009, 48.9%; 2010, 42.8%; 2011, 46.6% and 2012, 48.2%. Those who completed their studies in 2008 (and were therefore covered by the 2009 survey) had the best chance of finding a job. Clearly, the world economic crisis has had a significant effect. Assuming no changes in other variables, the economic situation alone has decreased labour market entry chances by 36% for the graduates of 2009, and by 35% and 40% for the graduates of 2010 and 2011 respectively.

In general, the survey findings suggest that the graduates who have the best chance of entering the labour market successfully are those who were trained in an occupation they were truly interested in. Male graduates’ chances are 1.6 times better than those of their female counterparts. Two factors, a good scholastic record and serving an apprenticeship, each enhanced the chances of labour market entry by 1.3–1.4 times.

Regional differences are considerable. The findings suggest finding a job is easiest for graduates who went to vocational school in Central Hungary, which is the most developed region.

Unemployment risk

The next part of the report focuses on graduates who have failed to find a job, and analyses the factors which influenced their unemployment risk.

The findings show that nearly one-fourth of the graduates surveyed were unemployed nine months after the completion of their vocational education. Broken down by the four years during which the survey was carried out, the proportion who had no work were: 2009, 21.2%; 2010, 24%; 2011, 23.1%; 2012, 28.2%. Difficult labour market conditions due to the economic crisis have increased the risk of becoming unemployed by 1.5–1.6 times each year.

The survey findings suggest that the risk of unemployment depends primarily on the graduates’ family background and place of residence. Children of highly educated fathers are more likely to avoid unemployment, while those with less educated or unemployed fathers face a 1.3–1.4 times higher risk. Factors that significantly reduce the risk of unemployment by between 20% and 30% are the intention to study further, choosing an occupation that matches personal interests, a good scholastic record and knowledge of foreign languages. Apprenticeship at a host company also reduces the likelihood of unemployment by 30% to 40%.

Enrollment in further studies

The third part of the report examines graduates’ engagement in further studies. ‘Further studies’ is used as a general term, covering secondary education leading to a secondary school leaving certificate, further training in respondents’ original occupation, vocational training in an occupation other than the original, and higher (university) education.

On average, more than a quarter of the graduates were engaged in further studies nine months after leaving secondary vocational education. Figures for the four years of the survey are as follows: 2009, 27.9%; 2010, 32.4%; 2011, 29.1 %; 2012, 22.6 %.

The ambition to study further is more common among women than men. A good scholastic record, knowledge of foreign languages and having better educated fathers enhance the likelihood of opting for further studies by 1.2–1.4 times. In contrast, choosing an occupation that matches personal interest reduces it by 33%. The likelihood of undertaking further studies is highest in Northern Hungary and in South Transdanubia, while it is lowest in Central Hungary, presumably due to better employment possibilities.

Conclusions 

The survey shows that entry to the labour market is only partially dependent on young entrants’ personal characteristics and efforts. Family background and place of residence play a decisive role. Until now, the education system has failed to counterbalance these disadvantages.

The report draws attention to the importance of early career guidance and personal advice, since the research clearly shows that being trained in an occupation you are truly interested in is the key to success.

Apprenticeship has proved to be another decisive factor and the report recommends the strengthening of links between employers and vocational training institutions.

It also stresses that acquiring solid general knowledge and learning skills is crucial for skilled graduates. Nowadays, the mission of vocational education is not only to provide recognised qualifications but also to pave the way for lifelong learning.

Commentary

As the results of the survey show, recent changes in the vocational training system have been only partially successful. Further steps are needed to ensure that students acquire an adequate mix of generic and specific (occupational) skills which allow them not only to move smoothly into their first job, but also to change jobs if necessary, and take up further learning during their working lives. 

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