True and false remedies for long time unemployment in Visegrad countries

Two in ten working age adults have been out of work for over a year in Visegrad economies and long term joblessness is especially high among the uneducated. The employment disadvantage of uneducated workers tends to be larger than in Western European countries, and is especially grievous in Hungary, where a relatively large share of the labour force has only completed primary school. The build-up of long term joblessnes  may take its toll both on the individual and the economy. Beside the loss of human capital and potentially harmful effects on health and mental health, the lower job search intensity of the long term unemployed may lead to weaker wage adjustment and slower economic recovery. Long term non-employment also increases poverty and social exclusion, which may further constrain economic growth. Reducing long term unemployment by activating the unemployed, increasing the education level or preventing early retirement could potentially increase the total employment rateby 2-3 % points in the Visegrad countries.

The publication was authored by Ágota Scharle, with contributions from Márton Csillag, Lucia Mýtna Kureková, Monika Maksim, Anna Orosz, Filip Pertold, Izabela Styczyńska, and Balázs Váradi. It was prepared during the Policy workshops for V4 think tanks, sponsored by the Visegrad Fund.