HUNGARY POVERTY AND SOCIAL EXCLUSION IN RURAL AREAS

of 38 /38
European Commission country: HUNGARY author: Gabriella Vukovich POVERTY AND SOCIAL EXCLUSION IN RURAL AREAS Final Report Annex I Country Studies

Transcript of HUNGARY POVERTY AND SOCIAL EXCLUSION IN RURAL AREAS

European Commission

country:

HUNGARYauthor: Gabriella Vukovich

POVERTY AND SOCIAL EXCLUSION IN RURAL AREAS

Final Report

Annex I

Country Studies

122

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 123

1. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

2. Main characteristics of rurality . . . . . . . . . . . . . . . . . 126

3. Main characteristics of rural poverty . . . . . . . . . . . . 130

4. Rural poverty and policies . . . . . . . . . . . . . . . . . . . . 139

5. Poverty and groups at risk: case studies on significant groups at risk . . . . . . . 144

6. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

7. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

This study is supported for under the European Community action programme to encourage coopera-tion between Member States to combat social exclusion (2002-2006). This programme is managed bythe Directorate-General for Employment, social affairs and equal opportunities of the EuropeanCommission.Neither the European Commission nor any person acting on behalf of the Commission may be heldresponsible for the use that may be made of the information contained in this publication.

http://ec.europa.eu/employment_social/spsi

Contractor: Fondazione Giacomo BrodoliniContact person: Marilena Sacchettawww.fondazionebrodolini.it

Authors of the Final Study: Paola Bertolini, Marco Montanari, Vito Peragine.National Corrispondents: Lilia Abadjieva (Bulgaria), Luc Behaghel (France), Paola Bertolini (Italy),Nikolaos Bouzas (Greece), Ruta Braziene (Lithuania), Patrick Commins (Ireland), Philomena De Lima(UK), Oana Gherghinescu (Romania), Elvira Gonzalez (Spain), Florindo Ramos (Portugal), KarenRefsgaard (Norway), Mateja Sedmak, Blaz Lenarcic (Slovenia), Elzbieta Tarkowska (Poland), AchimVanselow, Claudia Weinkopf, Thorsten Kalina (Germany), Gabriella Vukovich (Hungary).Scientific Committee: Philomena De Lima, Marcello Gorgoni, Sabrina Lucatelli, Enzo Mingione,Karen Refsgaard, Annamaria Simonazzi, Francesca Utili

© European Communities, 2008Reproduction is authorised provided the source is acknowledged.

Executive Summary

The definitions of rural areas in Hungary are not always consistent with each other and there is no single defini-tion for rurality. The most widely accepted interpretation is based on the types of settlements.

Although the categories of villages and towns do not exactly cover urban and rural areas, lacking exact delineationsand especially because there are no statistical breakdowns according to the urban or rural nature of the settlements(but sample surveys do provide data on poverty and social exclusion in a towns/villages breakdown), we mainlyused in the study the village/town breakdown as a proxy of urban/rural. This is widely accepted in the

Hungarian literature. This is the case in the National Development Plan, as well as in the Rural DevelopmentPlan and the National Action Plan on Social Inclusion and the National Report on Social Protection.

There was a need to use a geographical approach for some indicators, i.e. for those where NUTS 2 (7 regions)

or NUTS 3 (19 counties) level data are available. The Central Statistical Office developed 5 categories of devel-opment of the NUTS 4 level micro-regions (157). The basis of the classification is a set of indicators (proportionof foreign owned enterprises, household income estimated from personal income tax files, number of enterprisesper population, unemployment rate, net migration, number of telephone subscriptions per population number ofcars per population) related to the level of development:

a) dynamically developing regions (the majority of the indicators is more than 10 % higher than the non-urban average)

b) developing regions (the majority of the indicators is less than 10 %higher than the non-urban average)

c) upward moving regions (the majority of the indicators is close to the non-urban average and there are signsof improvement)

d) stationary regions (the majority of the indicators is more than 10 % below the non-urban average)

e) declining regions (the majority of the indicators is more than 15 % below the non-urban average).

Generally speaking, the Eastern part of the country is less developed than the Western and Central part. The riskof poverty is also larger in the less developed regions.

Development policies in general declare the aim of improving the situation of less developed regions or settle-ments. Accordingly, some tender specifications, especially in social protection programmes and in the SAPARDplan 2000-2006, give preference to the less developed or declining regions.

The most recent Rural Development Strategic Plan, for 2007-2013 will also focus mostly on activities carriedout in villages, i.e. in rural areas. The RDSP 2007–2013, besides the usual definition of villages as rural settlementsalso identifies Less Favoured Areas. One of the 3 priorities in the National Strategy Report on Social Protection

and Social Integration for the years 2006-2008 is to decrease the spatial–regional disparities, to improve the liv-ing circumstances of the population residing in the least developed micro-regions or settlements of the country.

Inhabitants of villages are more at risk of poverty than inhabitants of towns and cities (The difference between thecapital and villages is almost threefold). The smallest settlements have larger proportions of risk groups, whichhave implications for income poverty and deprivation.

Poverty is strongly influenced by household structure. Poverty and social exclusion is more likely in larger fam-

ilies and especially among Gypsies. The risk of poverty in families with more than 3 children is 2.5 times

higher than in childless families. There are other factors, such as: level of education, activity status which havea strong influence on the poverty rate

123

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Roma ethnicity means a much higher risk of poverty and social exclusion. Besides higher income poverty per-centages (estimates vary between 35–55 %), the Roma live under worse housing conditions, their health status isworse and life expectancies are lower, activity rates among the Roma are low, child poverty is especially highbecause of larger numbers of children in Roma families.

The main groups at risk or vulnerable groups identified in the scientific literature and also identified in the offi-cial policy documents are: large families, single parent families, people with lower education, the unemployed,inactive persons of working age, Roma/Gypsy population, aged persons especially in one-person households, peo-ple living in smaller villages, especially in the eastern part of the country

Social policies, including welfare policies, and rural policies are mostly centralized. Social policy implemen-tation, however is mostly decentralized, most social policy measures are implemented at the local community level,with normative funding from the central government. Rural development is implemented at central or NUTS 2regional level.

The welfare system is generally institution oriented rather than problem oriented. Rural development policies, onthe other hand, do not include welfare elements; their focus is on agriculture, on economic development and theinfrastructure in rural areas. There is little overlap and synergy between social policy and rural development policy.

There are currently three solutions in welfare policy that could be included into rural development policy: the spe-cial development programmes of backward regions, the village janitors and the welfare plot programmes.

The smallest villages, those of a population of 600 or fewer inhabitants receive a normative financial provisionfrom the central government budget to maintain the services of the village janitor, villages larger than that main-tain these services from their own resources if they choose to do so.

The essence of the agricultural welfare plot programme is that poor and/or socially excluded families who have noassets of agricultural production or cannot operate such assets effectively are provided agricultural plots and/orother means of production under preferential circumstances to enable them to grow crops or other produce or haveanimals thus creating subsistence farming opportunity or possibly even market presence, through activating pri-vate, community and local resources. A large proportion, around 40 per cent of the beneficiaries (10 thousands) ofthe programmes are of Roma ethnicity.

124

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

1. Overview

The national review contains definitions that are commonly used in Hungarian scientific literature and in officialdocuments. The OECD definition is not used widely, the dichotomy villages vs. towns and cities are used ratherthan urban vs. rural in Hungarian documents. Another approach is to analyse characteristics of settlements of var-ious size categories. This is sometimes more useful because the conditions for a village to become a town are notdefined in quantitative terms.

The geographic location of the settlements or micro-regions, although not decisive has an influence on the devel-opment level. Regions and settlements in the Eastern part of the country are more likely to be underdeveloped, tohave larger proportions of poor, undereducated, unemployed people, of larger families.

Similarly, smaller settlements are more likely to be less developed, and have larger proportions of poor, undered-ucated, unemployed people, socially excluded groups and larger families.

During the 1990ies long-term poverty and social exclusion have been concentrated in the less developed regionsof the country and in villages.

Development strategies address the situation of small settlements and of less developed regions. Some programmestarget special resources and funding conditions to development projects in general and to social protection projectsthat aim at improving the living conditions and quality of life in less developed areas.

Social policy decision making is mostly at central, national level, and the resources of implementation are alsomostly provided from the central government budget. In recent years, however, with the opening of EU pro-grammes and funds, local settlements or groups of settlements can apply for grants or other development funds tofulfil, among others, their social policy needs. The problem is that especially in the communities where suchresources would be most needed, the contributing capacity of the community to co-funding is inadequate.

Around 14 % of the total population lives in poverty, i.e. below the threshold of 0 % of the median equivalentincome. The poverty rate in villages is 20 %.

Other dimensions of deprivation (access to health care, to education, especially higher education, access to infor-mation, internet penetration etc.) also show that village dwellers face more challenges in terms of social exclusionthan city dwellers).

The main risk groups are:

• Large families

• Single parent families

• Lower education

• Unemployed

• Inactive persons of working age

• Roma/Gypsy population

• Aged persons in one person households

• People living in villages, especially in smaller villages or in the less developed areas of the country (espe-cially in the eastern part of the country)

125

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

2. Main characteristics of rurality in Hungary

2.1. Definition of rural areas

The definition of rural areas in Hungary is not very consistent and there is no single definition for rurality. The def-initions described below are used across the country, there are no regional differences in definitions.

The most widely accepted interpretation is based on the types of the settlements.

Hungarian settlements (communities, NUTS 5) are grouped in 4 legal categories:

• the Capital, Budapest

• cities that are the seats („capitals”) of counties and other cities which although are not county seats have thesame legal status (the latter are cities of more than 50 thousand inhabitants)

• towns

• villages

Whether a settlement is a village or a town depends on an administrative decree. Villages can be decreed to becometowns by the President of the Republic. The conditions are rather broadly specified: a village can be decreed to bea town if the development and the regional role of the settlement justifies it. The development criteria are not quan-tified in the law, only qualitatively cited (adequate economic development and infrastructure, the existence of insti-tutions like educational, public health institutions and the organisational and governing capacity of the self-gov-erning body.)

In principle, villages should be rural areas and the different categories of towns should be urban areas. In practice,there are many towns that were awarded the title of town by merits other than urban characteristics (for instance,historical importance). Also, there is a large variation of settlement sizes, among both villages and towns. Hungaryhad 3145 settlements on January 1st 2006, of these 2856 were villages, besides the Capital 22 had the legal statusof county seats and 266 were towns. (CSO, 2006a.)The population size of both towns and villages varies greatly: there are towns of around or even less than 2 thou-sand inhabitants and villages of more than 10 thousand. (CSO, 2006a.)Although the categories of villages and towns do not exactly cover urban and rural areas, lacking exact delineationsand especially because there are no statistical breakdowns according to the urban or rural nature of the settlements,we shall mainly use in the study the village/town breakdown as a proxy of urban/rural. This is widely accepted inthe Hungarian literature.

There are seven NUTS 2 regions in the country, 6 of them consist of 3 NUTS 4 level counties (WesternTransdanubia /I/, Southern Transdanubia /II/, Northern Transdanubia /III/, Southern Great Plain /V/, NorthernGreat Plain /VI/, Northern Hungary /VII/,) and Central Hungary (/IV/, Budapest and Pest county surrounding theCapital). There are differences between the development of the regions. The Eastern part of the country is, in gen-eral, less developed than the western part, consequently many villages in the Western regions are far more pros-perous than some towns in the Eastern regions. It should also be noted that 3 of the 7 Hungarian NUTS 2 regions(Northern Hungary, Northern Great Plain, Southern Great Plain) are among the 10 least developed of the 254regions of the EU (EU-25).

At the NUTS 4 level there 157 micro-regions. The Central Statistical Office developed 5 categories of develop-ment of the NUTS 4 level micro-regions, mainly for analytic purposes. The basis of the classification is a set ofindicators (proportion of foreign owned enterprises, household income estimated from personal income tax files,number of enterprises per population, unemployment rate, net migration, number of telephone subscriptions perpopulation number of cars per population) related to the level of development.

126

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

The micro-regions are classified as

• dynamically developing regions (the majority of the indicators is more than 10 % higher than the non-urban average)

• developing regions (the majority of the indicators is less than 10 %higher than the non-urban average)

• upward moving regions (the majority of the indicators is close to the non-urban average and there are signsof improvement)

• stationary regions (the majority of the indicators is more than 10 % below the non-urban average)

• declining regions (the majority of the indicators is more than 15 % below the non-urban average).

Figure 2. Micro-regions by development level

Source: Hungarian Central Statistical Office, www.ksh.hu

127

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Legend:

Dinamikusan fejl d =Dynamicallydeveloping; 22microregions

Fejl d = Developing;40 microregions

Felzárkózó =Underdeveloped butupward moving; 45microregions

Stagnáló = Stationary;37 microregions

Lemaradó = Declining,24 microregions

Figure 1. The regions and micro-regions of Hungary

Legend:

Dinamikusan fejlödö =Dynamically developing; 22microregions

Fejlödö = Developing; 40microregions

Felzárkózó = Underdevelopedbut upward moving; 45 microre-gions

Stagnáló = Stationary; 37microregions

Lemaradó = Declining, 24microregions

There is a further distinction as regards the development of micro-regions: the category of Less Favoured areas, asdefined in the Council Regulation 1257/1999., Article 19. (06. July, 2004.) and Article 20. (13. July, 2004.) is some-times applied.

2.2. The different typologies of rurality in Hungary

The urban/rural distinction and the usual assessment of regional development are used in all types of developmentpolicies. Definitions are similar in various types of policies.

Development policies in general declare the aim of improving the situation of less developed regions or settle-ments. Accordingly, some tender specifications, especially in social protection programmes, give preference to theless developed or declining regions.

Rural development programmes are more focused on agricultural activities or the agricultural population, conse-quently their scope of activity is mostly in villages.

The measures intended to enhance the adaptation of rural areas in the SAPARD Plan 2000–2006 were envisagedto apply to areas classified as rural, subject to defined conditions. The criteria for rurality were the following:

• adverse demographic situation (natural growth, population density);

• aging and permanent outward migration (vitality index, migration balance);

• areas that are average or below the average in terms of economic development (number of business enter-prises and sole entrepreneurs per 1000 residents);

• areas that are average or below the average in terms of infrastructure (length of sewerage canals per lengthof water pipe network, number of passenger cars and main telephone lines per 1000 residents);

• areas that are average or below the average in terms of relative wealth (personal income tax per permanentresident);

• in general the area is average or below the average (complex indicator), (rate of unemployment, proportionof active employees in agriculture).

A recapitulation of indicators of rurality examined has shown that the regions defined by the complex indicator ofrurality were the same as those belonging to settlements having a population density of or below 120 capita / km2.

Thus the indicator of population density was adopted as an appropriate one to indicate rurality. Therefore, apply-ing the principle of concentration, from the fundamentally and typically rural areas with a population density of orbelow 120 capita / km2 were selected. Hungary’s SAPARD Plan concentrated on these areas as far as measuresaiming at the adaptation of rural areas were concerned. The totality of the surface of these areas is 77 921 km2

(83.7% of Hungary’s surface). The population of these areas was 3 883 212 people, 38.3 % of the wholeHungarian population.

The most recent Rural Development Strategic Plan, for 2007-2013, in line with the general objectives of improv-ing the competitiveness of agriculture and forestry, improving the environment in the countryside and improvingthe quality of life in rural areas and encouraging diversification of economic activity, will also focus mostly onactivities carried out in villages, i.e. in rural areas. The RDSP 2007–2013, besides the usual definition of villagesas rural settlements also identifies Less Favoured Areas. Agricultural production on Less Favoured Areas con-tributes to sustaining the agricultural employment, to the increase of the income-generating ability of rural areas,to the improvement of the quality of life in rural regions and to the sustainability of local communities.

Support for LFA contributes to the utilisation of abandoned lands and ensures an income supplement for farmerspursuing agricultural activities in less favoured areas. It promotes the restructuring of production and the extensivekeeping of (often endangered) animal species that adjust to the disadvantageous conditions. The compensation con-tributes to the preservation of farms in the affected areas and to the improvement of their viability. Within theframework of the RDSP 2007–2013, Hungary implements the “Support of Less Favoured Areas” programme withrespect to the criteria laid down in Articles 19 and 20 of Council Regulation 1257/1999/EC. Areas falling underArticle 19 are uniform as regards natural production conditions, and complying with all the three conditions deter-mined in the Article. The total area of such areas is 395,402 hectares, which is 6.3% of the total cultivated area and4.25% of the total area of Hungary.

Less favoured areas according to Article 20 are areas affected by specific disadvantages, in which farming shouldbe continued according to needs and subject to certain conditions, in order to conserve or improve the environment,

128

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

maintain the countryside and preserve the tourist potential of the area. The requirements set out in Article 20 aremet by a total area of 488,156 hectares, which is 7.77% of the total cultivated area and 5.24% of the total area ofthe country. The total surface of LFAs is 883,558 hectares that is 9.5% of Hungary’s total area, and 14% of the totalcultivated area.

One of the 3 priorities in the National Strategy Report on Social Protection and Social Integration for the years2006-2008 is to decrease the spatial–regional disparities, to improve the living circumstances of the population liv-ing in the least developed micro-regions or settlements of the country. The instruments proposed are financial sup-port to these settlements through the National Development Plan for the years 2007-2013, the expansion of currentpilot programmes, the introduction of complex programmes encompassing economic development, employment,training, community development and infrastructure development. Another strategic direction is to improve theaccessibility and availability of services in these regions and settlements, through multi purpose micro regionalcooperation in the field of health, social protection, education, libraries, information centres and through the devel-opment of public transport, community infrastructure and IT services in order to diminish geographical differences.

2.3. Comparison with the international classification proposed by the OECD

The application of the OECD classification is not really used in Hungary. Average population density is 108 inhab-itants per square kilometre (the OECD’s first criterion interprets rural area below 150 inhabitants per square kilo-metre; only the central region’s density (408) exceeds this limit due to the large weight, 1,694 million inhabitants,of the Capital, Budapest). Also the concept of “urban centre with more than 200 000 inhabitants” as described inthe third criterion is difficult to use, because besides the capital there is only one city (Debrecen, 211 thousandinhabitants) where this definition can be applied. So, the use of the OECD definition is not very effective inHungary.

The national approach focusing on the administrative status of town or village also has some shortcomings: themost important is that the population size of both towns and villages varies greatly: there are towns of less than 2thousand inhabitants and villages of more than 10 thousand.

Table 1. Population by settlement type and settlement size, 1st January 2006

Settlement size Settlement type(population size categories) Budapest Other towns Villages Total

< 499 – – 281 346 281 346

500 – 999 – – 489 353 489 353

1 000 – 1 999 – 5 855 935 027 940 882

2 000 – 4 999 – 193 774 1 281 494 1 475 268

5 000 – 9 999 – 685 534 283 595 969 129

10 000 – 49 999 – 2 257 482 54 266 2 311 748

50 000 – 99 999 – 758 508 – 758 508

100 000 + 1 698 106 1 152 241 – 2 850 347

Total 1 698 106 5 053 394 3 325 081 10 076 581

Source: Statistical Yearbook 2006. Central Statistical Office, Budapest, 2006 (CSO, 2006a.)

However, cities and towns can usually be described as urban settlements and villages as rural.

129

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

3. Main characteristics of rural poverty in Hungary

3.1. Measurement of poverty in Hungary

Hungarian measures are similar to EUROSTAT measures. For income poverty rate the threshold of 60% of theequivalent median income is used as poverty line. The Laeken indicators are available from Hungarian surveys.

The Hungarian statistical office also produces the threshold of subsistence minimum. this is the level of incomewhich is enough to provide the basic nutrition and housing needs which are necessary for subsistence. This levelis higher than the 60 % poverty threshold, but does not allow more than basic subsistence.

The main data sources are the Hungarian Survey on Income and Living conditions (SILC), the Household BudgetSurvey, and the Labour Force Survey, the Time Use and Lifestyles Survey. Whenever applicable, the 2001Population and Housing Census data is also used. Of the administrative data sources the unemployment registerprovides employment and unemployment data for each settlement, and for NUTS 4 micro-regions.

In the equivalence scale used in the Hungarian publications of the SILC data the first adult equals 1, subsequentadults equal 0,7, children under age 15 equal 0,5.

3.2. Rural poverty in Hungary

In national statistics on poverty data are available

➣ for 3 categories of cities and towns (Budapest, cities of county seat status, other towns) and

➣ for villages.

Poverty in large cities is far below the average, smaller towns are around the national average, while villages aremuch more affected by poverty than any other settlements. The difference between the capital and villages isalmost threefold. (CSO, 2006b.)

Table 2. Poverty rates by settlement type (2004)

Settlement type Poverty rate

Budapest 7,6

Cities of county seat status 8,5

Other towns 14,8

Villages 20,1

Total 14,3

Source: Hungarian Survey of Income and Living Conditions, 2005. Income data refer to 2004.

The distinction (and the data) exists on the basis of the different types of settlements. Inhabitants of villages aremore at risk of poverty than inhabitants of towns and cities. The smallest settlements have larger proportions ofrisk groups, which has implications for income poverty and deprivation.

Poverty is strongly influenced by household structure. The number of children under 18 years of age have a sub-stantial effect on income poverty. While the poverty rate of households without children is 7%, those living inhouseholds with one or two children are more likely to be poor. The poverty rate is extremely high among house-holds with at least three children under 18: the risk of poverty is three times higher than the average. (CSO, 2006b)Income poverty is relatively low among the elderly, but there are some vulnerable groups (for instance aged peo-ple in rural areas or living alone with low pension). According to the deprivation approach the households with atleast three children and the elderly have a considerably higher risk of poverty than the average.

The level of education also has a significant effect on the incidence of poverty. The higher the educational attain-ment, the lower the probability of living in poverty. The income poverty rate is 23% among people who have not

130

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

completed primary education, and 18% among those who completed only eight years of primary school. These val-ues are significantly higher than the average rate. (CSO, 2006b) The proportion of people with low educationallevel is higher in the villages than in the towns which is one of the most important factor behind the urban-ruraldifferences of poverty.There is a similarly strong association as regards the activity status of persons. The income poverty rate is aroundthree times higher than the average among the unemployed and among temporary workers. People with disabilitypension, or on maternity leave receiving maternity benefits have also higher risks to be poor. (CSO, 2006b) Theunemployment and inactivity rate are substantially higher in the rural areas than in urban settlements.Furthermore the income in the same activity and employment categories is smaller in villages than in towns andespecially smaller than in the capital.To sum up, the household structure, the educational attainment, and the activity status are important factors deter-mining poverty. The population of villages in all these factors is less favoured which leads to a higher poverty riskamong the population in rural areas.

3.3 Multi-dimensional analysis of poverty and social exclusion in Hungary

Geographical locationGeographical location is also pertinent: disadvantages and risk factors often are cumulated in underdeveloped set-tlements or backward regions of the country. Also, access to factors of development and to services and institutionsof human capital development (e.g. education and health) and other public services is worse in villages and in lessdeveloped areas than in most of the cities and towns and in more developed areas.

Geographical location has a clear impact on poverty and social exclusion. Regions and settlements in the Northernand Eastern parts of the country are in general less developed. This can be illustrated, among others by the num-ber of tax payers and the rate of registered unemployed. (See maps below at NUTS 3 level.

Figure 3. Number of tax payers per 1000 population, 2004

Source: Hungarian Central Statistical Office, www.ksh.hu

131

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Figure 5. Length of sewerage system per 1 kilometre water pipe system, 2004

Source: Hungarian Central Statistical Office, www.ksh.hu

Figure 4. Registered unemployment rate, December 2004

Source: Hungarian Central Statistical Office, www.ksh.hu

Generally speaking, the Eastern part of the country is less developed than the Western and Central part. The riskof poverty is also larger in the less developed regions.

Physical infrastructure, accessibility (roads, railways, etc..), housing quality and utilitiesPhysical infrastructure, accessibility (roads, railways, etc..), housing quality and utilities show varied pictures inrural areas.

Rural areas in general have more limited accessibility than larger cities, though all settlements are accessible bypublic road. The railroad network, naturally, does not reach all settlements, but bus transport is available in settle-ments that are not along the railroad lines. Small villages, however, although accessible by rail or bus transportmay not have employment friendly timetables, i.e. commuting from some of these villages is difficult.

Housing quality in terms of dwelling surface/inhabitant or number of rooms is better in villages than in large cities.Water supply is almost universal, electricity supply even more so. However, some districts or settlements, espe-

132

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

cially of small villages in underdeveloped areas may not be connected to the sewerage system. Recent develop-ment projects, however, resulted in improvements in this area, as many villages have been able to rely on EU fund-ing to build sewerage systems.

The housing quality of the most vulnerable groups in rural areas (Roma population, aged persons) is very poor.

Access to health care and long term careHealth care in principle is accessible to everyone. Some of the small and underdeveloped villages or even towns,however, have difficulties in finding general practitioners or paediatricians. The number of patients per doctors ishigher in the less developed regions of the country.

Figure 6. General practitioners and paediatricians per 1000 population, 2004

Source: Hungarian Central Statistical Office, www.ksh.hu

The number of patients per doctors and, consequently, waiting times are larger and longer in these settlements.Alternatively, patients have to travel longer distances to have medical treatments.

The length of time needed for patients to reach the closest hospital or general practitioner is longer for people withlower income. Urban/rural differences also exist, as hospitals and specialised outpatient care centres are located incities and towns. This mainly causes problems for poorer people who seldom own a car and for inhabitants ofsmaller villages, who have less access to convenient transportation. The current restructuring of health care willdeteriorate this situation.

There is a shortage in log-term care, but the situation may improve some time in the future, after the restructuringof health care services, which aims at reducing the capacity of active inpatient care and increasing the capacity oflong-term care.

EnvironmentIn Hungary, biodiversity is rich in natural or semi-natural habitats, but poor in intensive large-scale arable crop pro-duction areas. The species of wild fauna and flora of Hungary and the native animal stock represents outstandinggenetic value, the game stock and the rare agricultural plant species of Hungary attest high genetic diversity.

Hungary is characterised by natural values of significant size and extent. More than 9% of the country’s territory(857 thousand hectares) is under nature protection. 837 thousand hectares of this area are of national importance,out of which 110 thousand hectares are highly protected areas.

Territories under natural protection can be categorised as follows.

133

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

➣ National Park (485 thousand ha)➣ Landscape Protection Area (324 thousand ha)

➣ Nature Conservation Area (27 thousand ha)

➣ Natural Heritage (1 pcs)

On another level of protection, but with national importance there are the territories of the Nature 2000, the natu-ral areas, the Environmentally Sensitive Areas and the ecological corridors.

The approximately 40% of the nationally protected acreage that is under agricultural cultivation is characterizedby less fertile soils and conditions are generally less amenable to farming. In such areas, extensive forms of agri-culture coupled with respect to environmental assets could be a solution for local farmers.

467 special protection areas and 55 special bird protection areas have been designated. The overlap of the two typesof areas is about 41%. According to preliminary estimations, agricultural areas marked out as Natura 2000 areascover 483.4 thousand hectares of grassland and 522.6 thousand hectares of arable land, 773.4 thousand hectares offorest, of which 207 hectares are in private hands. The Natura 2000 network partly overlaps with the natural areasprotected by domestic law: this is 39% of the designated Natura 2000 areas. In line with the objective of the preser-vation of natural heritage, the realisation of the Natura programme will be based on the Natura management planselaborated within the framework of the protection of natural heritage.

Types of activities and labour market structureIn the national economy, the services sector accounts for 62 % of employment, industry employs 33 %, and agri-culture it is 5 %.

Although most of agriculture and farming is in villages, the decline of the contribution of agriculture to the eco-nomic performance of the country has led to the diversification of economic activities in villages, too. The diver-sification in villages, however is not yet adequate, development plans therefore aim at growing diversification, inorder to provide higher quality of life in villages.

Farming, farmers and agricultural employeesThe conditions of agricultural production (soil conditions, climate and geographical conditions) are favourable ininternational comparison. 83% of the country’s territory (9.3 million hectares) is suitable for various agriculturaland forest management activities, depending on the productivity of the soil, thus arable land is a resource of utmostimportance and a key factor in production in Hungary.

As compared to the other sectors of national economy, the share of agriculture is decreasing. In 2005 the contribu-tion of agriculture to the gross domestic product (GDP) was 3,7 %, together with food industry approximately 6,1%. The share of agriculture and food industry in exports amounted to 7,2 %. As to investments the agriculturalsector contributed to the total of investments in the national economy by 4,4 % in 2005, and as to gross output theshare of agriculture and food industry accounts for 8,8 % of the total; both figures indicate a slight increase com-pared with the figures of the last years.

In 2004 and 2005 agricultural activities were pursued on 63 % of the country’s 9.3 million hectare territory, with48.5 % used as arable land, 11.4 % as grassland and 3.1 % as , vineyards and orchards. 19.1 % of the total areais covered by forest (the EU-25 average ratio of forest cover is 35,7 %) and 1,02 % is covered by reeds and fish-ponds. The average ratio of agricultural land in the countries of the EU is significantly lower than in Hungary (EU-25: 37,3 %). No major change had occurred from 2000 to 2005 in the method of land use and in the structure formof cultivation. 54.8 percent of total agricultural land is used by economic organisations, while 45.2 percent is usedby private farms (2005 data). As the overwhelming majority of land is used as arable land, this determines thestructure of agricultural production and the diversification possibilities.

Subsistence economy is not important in a macro-economic perspective. About 3 % of total household consump-tion is from own production.

Family compositionAverage household size has decreased over time, due to declining fertility, while the number of households hasincreased, associated with the increase in one-person households. Some social groups and some regions, however,are characterised by larger families. This is more frequent among the groups with lower education, lower income,the Gypsy population. Average family sizes are larger in the less developed regions of the country.

134

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Figure 7. Average number of family members (2001)

Source: Hungarian Central Statistical Office, www.ksh.hu

Poverty and social exclusion is more likely in larger families. The risk of poverty in families with more than 3 chil-dren is 2.5 times higher than in childless families.

Age structureHungarian population has, since long decades, been characterised by declining fertility. Natural decline of the pop-ulation started in 1981, and has been continuous since then. In association with fertility decline, the ageing of thepopulation is also observed.

Figure 8. Proportion of population aged 60+

Source: Hungarian Central Statistical Office, www.ksh.hu

135

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Figure 9. Proportion of population aged 0-14

Source: Hungarian Central Statistical Office, www.ksh.hu

Both population decline and ageing will continue in the future. The old age dependency ratio is 22,6 (in 2004) andis expected to increase to over 35 by the year 2030. Regional (NUTS 2 regions) values of the old age dependen-cy ratio are expected to be between 33 and 38.

Access to educationAccess to education is, in principle available to everyone. This however is not the case in practice. While kinder-gartens and the first 4 years of primary education are available in most, although not all villages, 5th to 8th gradesof compulsory primary education have been discontinued in many smaller villages. 9th grade and higher years ofeducation are almost exclusively available in towns and cities. Secondary and higher education is, therefore, moredifficult to access from small villages.

Even if access to education is available, there is a certain amount of transmission of unfavourable circumstancebetween generations: the children of parents who have low educational levels are more likely to have low educa-tional levels themselves. This is especially the case in small villages and underdeveloped regions.

GenderThe situation of women in villages is worse among rural women in those dimensions where the rural population isless favoured than the urban population. The gender pay gap is not excessively large but it is persistent: womenearn about 15% less than men in the same types of jobs. Income in general is, however much lower in villages thanin cities and towns, and especially than in Budapest. Consequently women in villages have lower disposableincome than in towns, but that is true for the rural population in general.

Old women in villages, however are a specially disfavoured group as their pensions are much lower because in thepast the labour force activity and consequently the social security contribution period of rural women was muchlower than of urban women.

EthnicityThe 2001 population and housing census registered that 3.3 % of the population was of non-Hungarian ethnicity,1.9 % in Budapest, 2.6 % in other cities and towns and 4.8 % in villages. The Largest non-Hungarian ethnicgroup is the Roma population, 190 thousand in 2001, according to the census. Other estimates, however, concludethat the number of Roma is around 500 thousand.

Of the 190 thousand Roma, 57 % lived in villages in 2001, while of the total population only 33 % did.

Roma ethnicity means a much higher risk of poverty and social exclusion. Besides higher income poverty percent-ages (estimates vary between 35–55 %), the Roma live under worse housing conditions, their health status isworse and life expectancies are lower, activity rates among the Roma are low, child poverty is especially highbecause of larger numbers of children in Roma families.

136

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Migration (inflows and outflows)The migration balance of the capital is negative, although the population loss due internal migration has decreasedin recent years. Other cities and towns also experience an excess of out-migration over in-migration. Villages, onthe contrary, have more in-migrants than out-migrants, although their positive balance is on the decrease.

Figure 10. Balance of internal migration

Source: Demographic Yearbook, HCSO, Budapest, 2005.

CommutingIn 2001, 30 % of employed persons commuted daily to their workplace.

Commuting is more intense in regions that have a larger city as centre and especially from the villages and small-er towns around the capital, Budapest.

Figure 11. Proportion of commuters (%) among employed persons, 2001

Source: Hungarian Central Statistical Office, www.ksh.hu

137

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Balance of internal migration by settlement types, 2005

-20 000

-15 000

-10 000

-5 000

0

5 000

10 000

15 000

20 000

25 000

30 000

1990 2000 2001 2002 2003 2004 2005

Budapest Other cities and tow ns Villages

S D hi Y b k HCSO B d 2005

Child povertyThe last European Council (8-9 March 2007) stressed the need to fight poverty and social exclusion, especiallychild poverty, and to give all children equal opportunities. The issue is relevant in Hungary, too.

The number of children aged under 18 is 2,06 million. Families with children are more likely to be poor than otherfamilies. While around 13 % of the total population falls below the poverty level of 60 % of the median income,this proportion s 19 % among children i.e. 420 thousand children live in poverty. Considering the subsistenceminimum as poverty threshold, 28 % of the total population and 40 % of children (850 thousand children) fallbelow this level.

A strategic document on the fight against child poverty was submitted to the Parliament in April 2007, focusing onthe labour market integration of parents, on the upward mobility of children through education opportunities, aswell as on welfare provisions and on the fight against regional disparities. Among the aims of the strategy the sit-uation of children in villages and in underdeveloped regions is also addressed. According to the strategy, a seriesof two-year action plans will be elaborated identifying concrete targets and measures for each two-year period, thefirst two year action plan will be presented by the Government in Autumn 2007.

138

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

4. Rural poverty and policies

The main groups at risk or vulnerable groups identified in the scientific literature and also identified in the officialpolicy documents are:

• large families

• single parent families

• people with lower education

• the unemployed

• inactive persons of working age

• Roma/Gypsy population

• aged persons especially in one-person households

• people living in villages, especially in smaller villages or in the less developed areas of the country (espe-cially in the eastern part of the country)

The risk of poverty has increased in the 1990ies along a new dimension, namely geographic location. Although thesettlement type (villages) and/or the settlement size (small settlements) have always been risk factors for poverty,the risk of poverty and social exclusion in rural areas has increased dramatically during the 1990ies. By now itturns out that long-term poverty is mostly concentrated in rural areas and in the North-Eastern regions of the coun-try. The reasons for this are manifold. Agriculture has lost its economic importance to a large extent. Currently, thecontribution of agriculture to the GDP is around 5 per cent, and to employment about 3 per cent. Consequently avery small proportion of the rural population find their livelihood in agriculture. During the economic transforma-tion, since 1990, more than 1.5 million jobs disappeared, the number of employed persons has decreased by around30 per cent, from around 5.5 million to the around 3.9 million. City dwellers fared better in this process than vil-lage dwellers. The rapidly increasing service sector provided jobs to large numbers of the urban population and tomuch smaller numbers of the rural population, industrial development mostly took place in or around cities, more-over, the urban population had an important initial advantage in terms of educational attainments. Consequently

139

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Per capita income by sources

in urban and rural settlements, 2004 (HUF per annum)

542 806

726 036

26 216

16 504

178 036

193 468

66 395

60 25712 386

5 981

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

800 000

900 000

1 000 000

1 100 000

Villages Total Hungary

Other income

Other f inancial

welf are benef its

Pensions

Agricultural activ

Work in employ

or own enterpris ,

outside agricultu

66.272.0

3.21.6

21.719.2

8.1 6.01.20.7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Villages Total Hungary

Figure 12. Per capita income in rural and urban areas

the jobless population of urban areas had much better chances to find employment than jobless persons in ruralareas.

Under these circumstances, the income of the population in villages is much lower than the national average andespecially lower than in larger cities. The composition of income sources is also different in villages: both theamount and the weight of income related to work is lower and the weight of social transfers is higher in villagesin per capita incomes. The diminishing role of agriculture is reflected in the low proportion (3,2 per cent) of agri-cultural income in the total income of the population living in villages.

Social policies, including welfare policies, and rural policies are mostly centralised. Social policy implementation,however is mostly decentralised, most social policy measures are implemented at the local community level, withnormativee funding from the central government. Rural development is implemented at central or NUTS 2 region-al level. On the whole, there is little scope for decentralised action, because the resources are scarce at the locallevel.

While local communities have locally elected self-governing bodies which, in principle can bring majority deci-sions in almost every sphere of life, their hands are bound because they have very hardly any own resources.Communities have revenue from local taxes, these, however constitute, on the average only around 10 per cent oftheir revenues. The enterprises situated in the settlement pay a 2% tax on turnover and the communities can levyreal estate. this however increases the gap between backward and more developed regions and settlements. Theless developed regions and settlement have few enterprises and especially few enterprises with large turnover.These are also the regions where the inhabitants are in much worse financial situation than in better developed andlarger settlement, therefore the tax-paying capacity of their population is very low, for which reason many com-munities cannot increase the burden by real estate tax.

The majority of local revenues are from central government sources to cover the cost of central policies and pro-grammes implemented locally. The amounts transferred to the local communities are regulated on a normativebasis, e. g. per head of students for education, per head of population for social transfers etc. The amounts trans-ferred cover the expenses of the services, and leave little or no margin for resource reallocation locally. Indeed,communities often have to top-up the central transfers from own resources to maintain the institutions or to main-tain the quality of services. Recently, since the availability of EU development programmes and funds, communi-ties (or associations of communities) can apply for various grants and other development funds, but the less devel-oped regions and settlements are, again, in a disadvantageous position because they cannot raise the amounts need-ed for co-funding.

On the whole, the fact that social policy decisions are taken at the central level, means that there is little flexibili-ty of programmes and that special local needs are difficult to meet, although the local actors, i.e. authorities,experts, care providers are in the best position to identify local needs. On the other hand, because the local author-ities have little or no means of allocating resources to programmes they may draw up themselves, there is littleincentive for local social policy thinking.

4.1. Rural poverty and social policies in Hungary as reflected in EU-related policies

The Joint Report on Social Protection and Social Inclusion 2004–2006 stresses that while initiating broadreforms, the strategy also shows continuity with the previous National Action Plan in focusing on children, dis-abled persons and the Roma. At the same time the main priorities of the strategy also build to a large extent on theprevious strategic approach and interventions, especially in the area of access to employment (active inclusion) andtackling child poverty. In the priority of decreasing regional and territorial disparities the plan identifies the poor-est areas of the country where all social disadvantages, especially in terms of poor access to services are concen-trated. The complex problems of these areas and the focus groups is and will be addressed through programmescarrying out integrated policy mixes (so-called complex programmes) according to the NSR. The National ActionPlan stresses that there is a special focus on regional labour market policies, as regional labour market differencesare the second highest in the Union (the dispersion of regional employment rates was 9.4% in 2004), and aremarked by even more serious sub-regional differences. The National Action Plan also emphasises the significantregional differences in terms of income and access to services and housing. The risk of poverty strongly correlateswith growing segregation and the overrepresentation of Roma people in disadvantaged areas.

However, interventions aimed at helping disadvantaged regions to catch up seem unable to overcome the immenseregional differences in the country.

140

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

4.2 Rural poverty and main policies affecting rural areas as reflected in EU-relatedpolicies

4.2.1 SAPARD 2000-2006

The SAPARD Plan of Hungary 2000-2006 acknowledges that while in Western Europe the differences among theregions in terms of income production have gradually been decreasing since the 1980ies, in Hungary they have beenincreasing. On the other hand, while the regional concentration of the determining resources of economic growth(business and financial services, R & D) has become less pronounced in developed countries, in Hungary the cen-tury-long domination of the capital has not changed, actually, it has increased in the case of several activities.

The SAPARD Plan identified a number of strengths and weaknesses of rural areas, both as concerns natural fac-tors and economic and human factors, which are still mostly valid for rural areas in Hungary.

Rural areas have very favourable natural characteristics such as complex landscape endowments high degreeof biodiversity, relatively low load on the environment, the possibility of a healthier lifestyle, high number ofsunny hours, waters and underground waters suitable for irrigation and recreation, rich thermal waterresources. The main advantages for economic activities are supply of cheap labour force, raw materials (wood,stone, sand, gravel, clay, reed), the existence of unique and special regional products (breeds, fruits and veg-etables, craftsmanship), outstanding tourism attractions and opportunities. The positive features of the humanresources in rural areas are rich cultural heritage, living traditions, production experiences, traditional, region-ally specific professional knowledge, the conditions are provided for manifold economic activity, traditional hos-pitality, settled culture of labour.

Rural areas, however also have weaknesses, such as exposure to natural disasters (e.g. floods), erosion of thesoil, drought, environmental threats because of unsolved sewage water and waste management, acidificationof the soil, threatened drinking water bases. Among the weaknesses of the economic background isolation fromthe centres of economic processes, difficulties in access to information, outdated or abandoned industrialcapacities, low level of infrastructure, low level of human services, one-sided agricultural structure, low level ofincome, low enterprising potential (low level of entrepreneurial incentive due to lack of capital) could be men-tioned. Disadvantages in the human element in rural areas are depopulation, aging population, low qualifica-tion levels, high rate of persistent unemployment.

The SAPARD Plan concluded that the balance of the advantages and disadvantages of rural areas can be consid-ered positive in the case of the natural factors. It is clearly negative in respect of the economic processes and lessnegative in respect of the human factors. Small regions with multiple disadvantages can be found in every regionof the country.

The SAPARD Plan aimed at reducing the disadvantages of rural settlements primarily through infrastructure devel-opment, the diversification of the scope of activity and that of agriculture, the expansion of vocational trainingdesigned to disseminate new skills. All these together serve the domestic application of the rural development prin-ciples of the EU, within that the consolidation of the economic base of the countryside, its expansion, the improve-ment of rural employment. The vision of the Plan is that the stable economic base and modern agriculture willenable the socially acceptable living standard of the rural population, the expansion of the work opportunities andthe increase of income in rural areas. Thus the countryside would be able to fulfil its fundamental social functions.

Among the special objectives of the SAPARD Plan were job preservation and job creation in rural areas throughthe diversification of the activities and the improvement of the skills of farmers, as well as enhancing the capabil-ities of rural areas to retain population.

4.2.2 ARDOP 2004-2006

The Agricultural and Rural Development Operative Programme for 2004-2006 (ARDOP 2004-2006) statesthat rural areas are disadvantaged compared to urban areas as regards all indicators. Demographic processes,employment opportunities, the resulting high rates of unemployment and the considerable (and increasing) incomedisparities are particularly unfavourable features.

Moreover, low standards of rural production and residential infrastructure and services constitute a disadvantagefor the rural population, but they also reduce the attractiveness of rural areas for capital investments and hinderdiversification.

The Priority of the ARDOP dealing with the development of rural areas (Priority 3.) addresses some of themain structural weaknesses of rural areas, such as the inadequate infrastructure and the dependence of rural settle-

141

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

ments on agricultural production. It contains three specific objectives: improving the economic potential of ruralareas and increasing employment; making rural areas more attractive; developing and implementing integratedsmall regional pilot programmes (Leader+ approach). Such objectives were to be achieved by diversifying the agri-cultural activities and expanding the rural business activities, such as developing rural tourism (the latter includeson-farm tourism) and handicrafts and the marketing of quality products. Support was also envisaged to improvethe quality and the conditions of life of rural population by the development of adequate rural infrastructure andthe establishment of a more attractive residential environment, by strengthening rural communities and preservingand improving the natural and cultural heritage.

4.3 Significant measures affecting poverty and groups at risk in rural areas

The rural population is by now one of the major groups at risk of poverty and social exclusion. Social policy andwelfare policy strategies and programmes, as well as rural development strategies and programmes always identi-fy this as a major challenge, but do not address the issue adequately. Social policy mostly uses general solutionsand offers similar provisions across the country. Moreover, the provisions of the welfare system do not take thespecial nature of rural poverty into account, the welfare system is institution oriented rather than problem orient-ed. Rural development policies, on the other hand, do not include welfare elements, their focus is on agriculture,on economic development and the infrastructure in rural areas. There is little overlap and hardly any synergiesbetween social policy and rural development policy. There are, however, currently three solutions in welfare poli-cy that could be included into rural development policy: the special development programmes of backwardregions, the village janitors and the welfare plot programmes.

Village janitorsVillage janitors are an important factor of reducing social exclusion (though not poverty) in small villages. Theiractivities help the village to remain functional and village dwellers to be connected to the life of the whole socie-ty. The objective of initiating the programme, in 1992, was to prevent the decline of small villages, to decrease thedisadvantages of small villages, to improve the living conditions of village dwellers, to improve access to publicservices and welfare services, to expand the functions of villages, the development of local communities, toincrease the attachment of young people to the local society. The rationale behind the establishment of the post wasthat small villages did not have adequate resources to provide specialised institutional services to the population,whereas the village care provider delivers everyday non-specialised, general assistance to the population. Indeed,the village janitors, because of their proximity to the clients they service, their mobility and their equipment withvehicles may be and in many villages are the instruments connectedness for socially excluded groups in small vil-lages and remote rural areas, where even the basic services are missing.

The smallest villages, those of a population of 600 or fewer inhabitants receive a normative financial provisionfrom the central government budget to maintain the services of the village janitor, villages larger than that main-tain these services from their own resources if they choose to do so. Irrespective of the financial arrangement, thetasks are assigned by the municipal authorities, and the co-operation between the village janitor and other welfareproviding institutions also largely depends on the municipal authorities.

Village janitors work in small villages, their task is to assist village dwellers and those who live in remote areas intheir everyday life. Their typical tasks are to help in obtaining health care, e.g. by transporting the prescribed phar-maceuticals to the home of those in need or by transporting them to and from health institutions, transporting youngchildren to kindergartens, schools or extracurricular activities. They help in dealing with official matters but theyalso help in shopping, in carrying fuel into the dwelling etc. They can be an important source of information con-cerning welfare services, benefits, and in general transmitting information concerning needs and the instrumentsof relief between the municipal governing body and the population of the municipality. Depending on the pro-gramme identified by the municipality, some village janitors also organise cultural, sports and leisure time activi-ties, organise shopping tours, help in obtaining maintenance for household appliances, in purchasing fodder or pro-duce etc.

Village janitors can be an important source of information for the community authorities in signalling unmet needs.Old people, especially in villages, for fear of stigmatisation or from natural shyness often do not apply for assis-tance even when in urgent need. The janitor, who moves around the community and is well trusted by the popula-tion, can find out personally or from conversations with the people he or she services if this occurs and can signalto the local authorities or can help himself or herself if the nature of the need falls under his defined scope of activ-ities. Interestingly, families with children are less or not at all reserved about seeking assistance, it seems that ask-

142

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

ing for provision for the children is a stronger urge and socially more acceptable to poor and excluded people thanseeking help for themselves.

Although case studies have found that that some of the village janitors do not have sufficient equipment (the vehiclemay not be large enough, some of them may not have a telephone or other office equipment) and that some of thesmallest villages and a small proportion of the poorest and most excluded people are under serviced, the performanceof village janitors is, on the whole, good and the population they service is, in general, satisfied by the quality of theservices. The main problem is that many villages that are above the size limit of central government financial provi-sion, cannot afford to employ village janitors, although there would be a great need for such services.

Agricultural welfare programmesThe agricultural welfare plot programme is an active, productive social policy tool. The programme is operated bythe local municipality as an integral element of community policy.

The essence of the programme is that poor and/or socially excluded families who have no assets of agriculturalproduction or cannot operate such assets effectively are provided agricultural plots and/or other means of produc-tion under preferential circumstances to enable them to grow crops or other produce or have animals thus creatingsubsistence farming opportunity or possibly even market presence, through activating private, community andlocal resources. The beneficiaries receive assistance in obtaining access to the agricultural plot and/or other meansof production but the production itself is the result of their own work input. Family farming can become a sustain-able exercise that provides at least basic needs.

The main eligibility criterion of participation is social neediness. In practice, the beneficiaries of the programmesare poor and socially excluded families. Two major dimensions of social exclusion are dominant among the bene-ficiaries: geographical and ethnic.

The programmes are mainly implemented in the least developed regions of the country, and especially in micro-regions of small settlements that have serious lack of infrastructure, of capital and of job opportunities. Prior to thetransformation in 1990, the local agricultural cooperatives were the main employer, these have disappeared leav-ing the majority of the population of the regions unemployed and/or inactive. The labour market reintegration inthese regions has not succeeded until now.

A large proportion, around 40 per cent of the beneficiaries of the programmes are of Roma ethnicity. The dimen-sions of poverty and social exclusion are cumulated in the group of Roma, income poverty, consumption poverty,low education, low cultural consumption, substandard housing quality, poor equipment with household appliancesetc.

The estimated number of beneficiary families is around 10 thousand, around half of them are Roma. The positiveimpact of the programmes is, besides the fulfilment of at least the basic alimentary needs of the beneficiary fami-lies, that they constitute a pathway to the world of work for people who have been excluded from the labour mar-ket for a long period. The programmes reactivate them and increase their responsibility for their own life.Participation in the programme has a beneficial influence on future employment or entrepreneurial opportunitiesthrough the introduction of regular activities and responsibilities.

The content of the programme depends on the individual skills and capacities of the beneficiaries. However, animportant feature of the programme is capacity and skills development through participation in the programme.Various levels of assistance can be implemented, the lowest level enables the beneficiaries to approach or achievesubsistence farming, but, depending on the skills and performance of the beneficiaries, market production can alsobe achieved. The amount of the benefits can also vary from provision of goods, assets and services at productionprice to free provision.

In terms of rural development, the programmes have a number of advantages. Local policy has expanded with anew and flexible element, the path to social integration can be paved for excluded families, due to its productivenature, these programmes are much more accepted by the population at large than passive welfare transfers, theburden of long-term unemployment can be at least partially decreased, important human relation and interactionsare maintained which are necessary for the social inclusion of disadvantaged families, important human and natu-ral resources are activated.

143

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

5. Poverty and groups at risk: case studies on significant groups at risk

5.1 Roma/Gypsy population

The 2001 Population and Housing Census enumerated 190 thousand persons who reported that they were of Romaethnicity. However, because there is still a lot of prejudice towards the Roma, it is also widely thought that thereis significant underreporting of Roma ethnicity at the Census.

Romologists and sociologists studying the Roma population estimate higher numbers, the most likely estimate isthat the size of the Roma/Gypsy population is around 500 thousand (i.e. e. 5 per cent of the total population) inHungary. Their social situation, socio-economic status, living conditions, family size, income and income structureis markedly different from the majority population.

The living conditions and quality of life of the Roma in rural areas is even worse. The Roma/Gypsy population inrural areas often lives in segregated colonies in remote areas of villages, under very poor housing conditions,whereas in towns and larger cities they live under somewhat more integrated circumstances.

The following descriptions are based on the results of a survey entitled Turning Points of Life, carried out by theDemographic Research Institute of the Hungarian Central Statistical Office. This survey was part of a series ofGenerations and Gender Surveys initiated by the United Nations Economic Commission for Europe and co-ordinat-ed by INED (Paris), NIDI (the Hague) and the Max Plank Demographic Research Institute (Rostock). Because of thesample size the scope of the analysis is limited to the most important variables of poverty and social exclusion of theRoma. The survey covered the population aged between 18 and 75. Some of the tables are to be found in the Annex.

There is a significant difference between the urban/rural distribution of the Roma population and the total popula-tion. While only around 34% of the total population live in villages, more than half (52 %) of the Roma live invillages.

The distribution of the Roma between settlements of various sizes is also different from the majority population:much higher proportions of the Roma live in small settlements than of the non-Roma, whereas much smaller pro-portions of the Roma life in larger settlements.

The age distribution of the Roma is much younger than of the total population. Within the Roma population, thoseliving in cities and towns seem to be of a younger age distribution (i.e. there is a larger proportion of young adultsand a smaller proportion of middle aged and older people) than those living in villages.

The proportion of cohabiting partners is highest among the Roma living in villages, but even in cities and townstheir proportion is more than twice as high than in the majority population.

Average family and household sizes are significantly higher among the Roma. Around 40 per cent of the Roma livein households of 5 or more members, while among the non-Roma only around 16 percent live in such large house-holds. Since family size is one of the major risk factors of poverty and social exclusion, the predominantly largefamily and household size among the Roma has special significance for rural poverty.

Table 3. Distribution (%) of the Roma and non-Roma population by household size in urban andrural settlements

Household size (number of household members) Cities and towns Villages

Roma Non-Roma Roma Non-Roma

1 9,1 11,1 6,7 9,3

2 10,9 28,0 11,3 24,3

3 17,4 25,0 16,8 21,7

4 24,7 24,5 21,9 26,7

5 + 37,9 11,4 43,3 18,0

Total 100,0 100,0 100,0 100,0

Source: Own calculations from the Turning Points of Life Survey (Hungarian GGS) 2004

144

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

The very low educational attainments of the Roma population largely explain the poverty and social exclusion ofthe Roma in general and of the Roma living in villages in particular. The very few Roma who have completed theirsecondary education or achieved tertiary education are almost exclusively city-dwellers, and the proportion ofRoma living in villages who have not completed the 8 grades of compulsory primary education is excessively high,more than two fifth of village dweller Roma.

Figure 13. Educational attainments of Roma and non-Roma population

Source: Own calculations from the Turning Points of Life Survey (Hungarian GGS) 2004

Figure 14. Working Roma and non-Roma population

Source: Own calculations from the Turning Points of Life Survey (Hungarian GGS) 2004

The low performance of the Roma as concerns educational attainment is also the most important explanatory fac-tor behind the low employment rates of the Roma. In the population aged 18 to 75 covered by the survey, 52.5 %of the non–Roma but only 27.4 % of the Roma were employed. Unemployment among the Roma was very high(27.4 %) compared to the 5.1 % unemployment at the time of the survey among the non-Roma population.Unemployment among the rural Roma was higher (23.8 %) than among the urban Roma (19.2 %).

Among those inactive, the largest group in the non-Roma population is that of old-age pensioners (21 %), whileamong the Roma old-age pensioners are a very small group (6.6 %). The low proportion of old-age pensioners ispartly explained by the poor employment record of the Roma, many of who do not qualify for old-age pensions.Among the Roma, those receiving maternity benefits and disability pensioners constitute a more important group.The former is associated with the high fertility of the Roma, the latter with the bad health status of the Roma. TheRoma in villages are especially badly off in this respect, almost every fifth Roma in villages has the status of “otherinactive dependent” which means that they have no regular income, their only source of income is occasional or

145

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Distribution (%) of the Roma and non-Roma population by

educational attainments in urban and rural settlements

22,8

3,8

43,5

9,4

56,5

17,7

45,2

31,7

15,5

28,0

9,8

32,7

3,2

34,0

1,5

20,2

2,016,5

0,0 5,9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Roma Non-Roma Roma Non-Roma

Cities and tow ns Villages

Tertiary education

Secondary school

graduate (12 years)

Vocational training

8 grades of

compulasory primary

educationLess than 8 grades of

compulasory primary

education

Distribution (%) of the working Roma and non-Roma population

by type of work

0,0

20,0

40,0

60,0

80,0

100,0

Roma Non-Roma

All other types of w ork

Temporary:

occasionally w orking

as physical w orkerUnskilled w orker

Semi skilled w orker

Skilled w orker

regular welfare benefits or aids. The low proportion of students among the Roma aged over 18 is closely relatedto the negligible proportion of Roma with higher than secondary education.

Even among those who are working, the type of work is mostly low prestige and low paid among the Roma.Among the non-Roma, around half of the workers are non-physical workers, and among the physical workersaround half are skilled workers. Among the non-Roma, 13 % are non-physical workers, and among the Romaphysical workers the overwhelming majority, 80 % are semi-skilled, unskilled or temporary workers. (Figure 14)

Household income largely depends on the number of employed persons in the household. 55 % of Roma live inhouseholds, where nobody is employed, and village dweller Roma are in a worse situation in this respect, too: 62% of Roma in villages live in such households. In the city-dweller non-Roma population this proportion is only 24%, only slightly higher than what can be explained by the proportion of pensioners in the population.

Considering the low labour force participation and the type of work done by the low numbers of Roma who areemployed, it is not surprising that the Roma are largely overrepresented in the lowest income group. In the totalpopulation aged over 18, around one fifth fall in the lowest income quintile, whereas 70 per cent of the Roma fallin the lowest income category. The Roma in villages are even more concentrated in the lowest income quintile: 74% are in the 1st quintile.

Figure 15. Per capita income of Roma and non-Roma population

Source: Own calculations from the Turning Points of Life Survey (Hungarian GGS) 2004

Figure 16. People incapacitated by illness or disability

Source: Own calculations from the Turning Points of Life Survey (Hungarian GGS) 2004

Poor health status is among the important factors of low labour force participation in the country, but especially soamong the Roma, and within the Roma population among the rural Roma. Excessively high proportions of the rural

146

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Distribution (%) of the Roma and non-Roma population by income

quintiles in urban and rural settlements

63,5

15,6

73,8

28,5

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

Roma non-Roma Roma non-Roma

Cities and tow ns Villages

5th (highest)

4th

3rd

2nd

1st (low est)

Are you incapacitated by illness or disability?

60,871,2

57,6 64,3

39,228,8

42,4 35,7

0,010,020,0

30,040,050,060,070,0

80,090,0

100,0

Roma non-Roma Roma non-Roma

Cities and tow ns Villages

Yes

No

Roma, more than two fifths reported to be incapacitated by illness or disability. A slightly lower proportion, butstill close to two fifths of urban Roma reported the same. In the total non-Roma population the proportion of thoseincapacitated by illness or disability was 31 %, which is also very high in a European comparison, but clearlyshows much better health status than in the Roma population.

The survey also enquired about some items of deprivation. We have selected two of those for this analysis: theequipment of the dwelling with WC and shower or bathroom and whether the respondent takes a vacation at leastonce a year.

Around 94 per cent of non-Roma households was equipped with WC and shower or bath, but only around 56 percent or Roma households was. The situation of the rural Roma is the worst, less than half of these households hasWC and shower or bath.

Taking vacations is also a privilege of the non-Roma, although the proportion of the non-Roma who can take avacation annually is also very low, only about 34 %. Of the Roma living in villages only 7 % can go away forvacation

Figure 17. Vacation

Source: Own calculations from the Turning Points of Life Survey (Hungarian GGS) 2004

On the whole the data show that much higher proportions of the Roma live in poverty and are socially excludedthan of the non-Roma population. Moreover, the most important predictors of poverty and social exclusion (loweducational attainments, large family and household sizes, bad health status etc.) are concentrated in the Roma, andespecially in the rural Roma population.

5.2 Aged population

The aged population is, in general considered as a vulnerable group. However, during the 1990ies there has beena shift in the age distribution of poverty. Because of the possibly low, but still regular and guaranteed pensionincomes which are the most important sources of income of the aged, the poverty rate of the older population hasbecome much lower than the poverty rate of families with children. But poverty is still a risk for a number ofgroups within the aged population, especially for the aged living alone, and the aged in rural areas. On the otherhand, other dimensions of social exclusion are also very important in the aged population.

These issues will be highlighted through the results of the Hungarian SILC survey and the Time Use and LifestylesSurvey, both carried out by the Hungarian Central Statistical Office. In the analysis we consider the populationabove retirement age as aged population. In Hungary, the retirement age has been increased gradually to 62 years.However, because the retirement age of women was 55 and of men it was 60, the 62 year retirement age is alreadyvalid for men, whereas for women, it will only be the case in 2009. At the time of the SILC survey, women aged60 and over, and men aged 62 and over fell in the age bracket of above retirement age.

The age distribution of the aged population was almost similar in villages and towns at time of the survey. The sur-vey did not have a large enough sample size to analyse the age distribution of the aged population by settlementsize categories. Other data sources (census), however show that the smallest villages have much older population

147

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Do you go away for vacation at least once a year?

9,4

42,7

6,924,7

70,2

38,9

69,946,8

11,4 5,7 15,09,9

9,0 12,7 8,218,7

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

Roma non-Roma Roma non-Roma

Cities and tow ns Villages

No, for other reasons

No, there is no need

for it

No, w ould like to but

cannot afford it

Yes

than the larger ones, and that within the aged, the age distribution of older people is older in smaller villages.

The educational attainments of the aged population, which is one of the most important explanatory variables ofpoverty and social exclusion clearly shows the vulnerability of the aged rural population.

Figure 18. Educational attainments of older people

Source: Own calculations from the Hungarian SILC 2005 survey.

Source: Own calculations from the Hungarian SILC 2005 survey.

The educational attainments of the aged population in villages are significantly lower than in cities and towns. Invillages, 83 per cent of the aged have at most 8 grades of education, while in cities and towns this proportion is 60per cent. The proportion of secondary school graduates is almost double in cities and towns, and while tertiarygraduates are only 3 per cent in villages, they constitute 14 per cent of the aged in cities and towns.

The income distribution in the aged population is markedly different in urban and rural settlements. Among theurban aged much lower than 20 per cent of the population are in the first and in the second income quintile, andmuch higher than 20 per cent are in the 3rd, 4th and fifth quintile. Rural aged people are less favoured: while only12% are in the first quintile, this is almost double of the urban aged, whereas only 9 per cent (i.e. 2.5 times fewerthan in cities and towns) of the rural aged are in the 5th quintile. (Figure 19)

The income distribution already predicted that the risk of poverty is higher among the rural aged than among theurban aged: 7.4% of the aged persons in villages are poor while 2.8% of the urban aged are. (Figure 20)

148

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Educational attainments of persons above retirement age in

urban and rural settlements

17,6

41,8

26,6

14,0

35,3

47,9

13,9

2,9

0,0

10,0

20,0

30,0

40,0

50,0

60,0

Less than 8 grades

of compulasory

primary education

8 grades of

compulasory

primary education

Secondary (12

years) or

vocational

Tertiary education

Cities and towns Villages

Educational attainments of persons above retirement age living

alone, in urban and rural settlements

21,8

41,1

24,4

12,6

43,1 43,2

12,4

1,3

0,0

10,0

20,0

30,0

40,0

50,0

60,0

Less than 8 grades

of compulasory

primary education

8 grades of

compulasory

primary education

Secondary (12

years) or

vocational

Tertiary education

Cities and towns Villages

Figure 19. Per capita income of older people

Source: Own calculations from the Hungarian SILC 2005 survey.

Figure 20. Poor and not poor people

Source: Own calculations from the Hungarian SILC 2005 survey.

Figure 21. Housing quality for older people

Source: Own calculations from the Hungarian SILC 2005 survey.

149

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Distribution (%) of the persons above retirement age by income

quintiles in urban and rural settlements

6,3 11,9 6,8 14,815,7

28,720,2

30,024,9

28,7

24,6

29,928,3

21,6

27,8

18,124,9 20,67,29,2

0,010,020,030,040,050,060,070,080,090,0

100,0

Cities and

towns

Villages Cities and

towns

Villages

All persons above retirement

age

Persons above retirement

age living alone

5th (highest)

4th

3rd

2nd

1st (low est)

Distribution (%) of the persons above retirement age by income

quintiles in urban and rural settlements

97,2 92,6 97,2 91,3

7,4 8,72,8 2,8

0,010,020,030,040,050,060,070,080,090,0

100,0

Cities and tow ns Villages Cities and tow ns Villages

All persons above retirement age Persons above retirement age living

alone

Poor

Not poor

Distribution (%) of the persons above retirement age by

housing quality in urban and rural settlements

8,322,8

8,326,1

77,2 73,991,791,7

0,010,020,030,040,0

50,060,070,080,090,0

100,0

Cities and

towns

Villages Cities and

towns

Villages

All persons abov e retirement age Persons abov e retirement age

liv ing alone

Not

substandard

Substandard

Considering the index of serious deprivation, 27 per cent of the rural aged are deprived, compared to the 14.5 percent of urban aged. Among the aged who live alone, 42.1 percent are deprived in rural settlements, while in urbansettlements 23.9 per cent are.

The deprivation index and the housing conditions of the aged show that although their poverty rate in terms ofincome poverty may be lower because of the stability and guaranteed nature of their main source of income, socialexclusion in other dimensions may be very important. A large proportion of the aged, especially of the rural agedlive in substandard housing. (Figure 21)

Although the poverty rate of the aged may not be as high as for instance the poverty rate of large families, 10-11per cent of the aged both in urban and in rural settlements reported that they have to face major financial difficul-ties. On the whole, the rural aged find their financial situation more difficult than the urban aged.

Table 4. Distribution (%) of persons above retirement age by subjective perception of well-being inurban and rural settlements

How does your household live on the household income? All persons above retirement age Persons above retirement age living alone

Cities, towns Villages Total Cities, towns Villages Total

With major difficulties 10,9 9,8 10,6 14,3 12,4 13,8

With difficulties 21,9 23,4 22,4 25,2 23,3 24,7

With minor difficulties 45,7 52,1 47,8 39,4 50,9 42,8

Relatively comfortably 16,9 12,3 15,4 16,1 10,8 14,6

Comfortably 4,0 2,3 3,4 4,1 2,2 3,6

Very comfortably 0,6 0,1 0,4 0,8 0,3 0,6

Total 100,0 100,0 100,0 100,0 100,0 100,0

Source: Own calculations from the Hungarian SILC 2005 survey.

The aged find that housing costs are a great burden, the rural aged face the most serious difficulties in the winter.Only 16 per cent of the urban aged and 11 per cent of the rural aged reported that housing costs were no problemfor them.

Table 5. Distribution (%) of persons above retirement age by perception of the burden of housingcosts in urban and rural settlements

How much burden does the cost of housing mean in your case? All persons above retirement age Persons above retirement age living alone

Cities and towns Villages Total Cities and towns Villages Total

It is always a great burden 23,4 20,8 22,5 25,7 25,1 25,5

It is a great burden in the winter 37,1 41,6 38,6 36,4 40,4 37,6

It is a problem sometimes 23,6 27,1 24,7 21,4 23,9 22,1

It is no problem at all 15,9 10,5 14,2 16,5 10,6 14,8

Does not know 0,0 0,0

Total 100,0 100,0 100,0 100,0 100,0 100,0

Source: Own calculations from the Hungarian SILC 2005 survey.

As it was to be expected, very few of the aged reported that their health status was good, but on the whole it isalarming that more than 30 per cent of the urban aged and 54 per cent of the rural aged said that their health sta-tus was bad or very bad.

150

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Table 6. Distribution (%) of persons above retirement age by perception of health status in urbanand rural settlements

All persons above retirement age Persons above retirement age living alone

Cities and towns Villages Total Cities and towns Villages Total

How is your general health status?

Very good 1,8 0,5 1,4 2,1 0,7 1,6

Good 10,8 7,7 9,7 9,4 6,7 8,6

Appropriate 45,9 38,2 43,4 43,8 35,0 41,2

Bad 30,6 41,2 34,0 33,5 45,1 36,9

Very bad 10,9 12,4 11,4 11,3 12,6 11,7

Total 100,0 100,0 100,0 100,0 100,0 100,0

Do you have any chronic health problems?

Yes 72,1 70,1 71,4 76,6 71,7 75,2

No 27,9 29,9 28,6 23,4 28,3 24,8

Total 100,0 100,0 100,0 100,1 100,0 100,0

Source: Own calculations from the Hungarian SILC 2005 survey.

Having friends is an important aspect of the social inclusion of the aged. It turns out that 44 per cent of the urbanaged and as high as 56 per cent of the rural aged have no friends at all. The situation in villages is especially bad,which is surprising, as the social network in villages is generally considered to be more traditional.

Figure 22. Having and not having friends

Source: Own calculations from the Hungarian Time Use Survey 2000.

Another dimension of social exclusion is giving or receiving help from other households. It seems that the moretraditional social networks in villages are tangible in this respect: aged persons in villages are more likely both togive help to other households and to receive help from other households than their urban counterparts. This wasthe case for all the types of help, except for receiving money.

151

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Per cent of persons above retirement age having and

not having friends in urban and rural settlements

56,244,0

56,043,8

0,0

20,0

40,0

60,0

80,0

100,0

Cities and towns Villages

No

Yes

Table 7. Proportion of persons above retirement age giving help to or receiving help from otherhouseholds

Cities and towns Villages Total

Did you give or get help from others Received Gave Received Gave Received Gavein the last 12 months … help help help help help help

in household work 27,5 22,6 42,9 28,6 33,5 24,9

in caring for children or sick family member 8,0 24,7 12,4 28,5 9,7 26,2

in maintaining things around the household 22,0 6,4 30,2 7,5 25,1 6,8

in agricultural work 15,1 9,6 43,3 26,9 26 16,3

in gifts of food or clothing 28,8 36,3 35,1 40,6 31,2 37,9

money for daily living 7,1 10,5 5,3 11,4 6,4 10,8

larger amounts of money for special purposes 4,6 12,1 3,8 19,2 4,3 14,9

Source: Own calculations from the Hungarian Time Use Survey 2000.

Being a guest for a meal or receiving guest for a meal is an important social interaction in our society. Both receiv-ing guests and eating at someone else’s house seems to be more frequent among the urban aged than among therural aged. Eating at a restaurant is much less likely, and the proportion of those who do is almost similar amongthe urban and rural aged.

Table 8. Proportion of persons above retirement age receiving guests or visiting as guest for ameal, or visiting restaurants in urban and rural settlements

Cities and towns Villages Total

Did you visit someone as a guest for a mealin the last 12 months?

Yes 26,6 21,9 24,6

No 73,4 78,1 75,4

Total 100,0 100,0 100,0

Did you receive guests for a mealin the last 12 months?

Yes 25,8 23,0 24,7

No 74,2 77,0 75,3

Total 100,0 100,0 100,0

Did you have a meal in a restaurant in the last 12 months?

Yes 5,8 6,2 6,0

No 94,2 93,8 94,0

Total 100,0 100,0 100,0

Source: Own calculations from the Hungarian Time Use Survey 2000.

152

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

6. Conclusions

Hungarian measures are similar to EUROSTAT measures. For income poverty rate the threshold of 60% of theequivalent median income is used as poverty line.

Poverty in large cities (8,5%) is far below the average (14,3%), smaller towns (14,8%) are around the nationalaverage, while villages (20,1%) are much more affected by poverty than any other settlements. The differ-

ence between the capital (7,6%) and villages is almost threefold.

Poverty is strongly influenced by household structure. The number of children under 18 years of age has a sub-stantial effect on income poverty. While the poverty rate of households without children is 7%, those living inhouseholds with one or two children are more likely to be poor. The poverty rate is extremely high among house-

holds with at least three children under 18: the risk of poverty is three times higher than the average.

The level of education also has a significant effect on the incidence of poverty. The proportion of people with loweducational level is higher in the villages than in the towns, which is one of the most important factor behind theurban-rural differences of poverty.

There is a similarly strong association as regards the activity status of persons. The unemployment and inactivityrate are substantially higher in the rural areas than in urban settlements. Furthermore the income in the sameactivity and employment categories is smaller in villages than in towns and especially smaller than in the capital.

Geographical location has a clear impact on poverty and social exclusion. Regions and settlements in the Northernand Eastern parts of the country are in general less developed. Disadvantages and risk factors often are cumulatedin underdeveloped settlements or backward regions of the country.

Rural areas in general have more limited accessibility than larger cities, though all settlements are accessible bypublic road. The railroad network, naturally, does not reach all settlements, but bus transport is available in set-tlements that are not along the railroad lines. Small villages, however, although accessible by rail or bus trans-port may not have employment friendly timetables, i.e. commuting from some of these villages is difficult.

Housing quality in terms of dwelling surface/inhabitant or number of rooms is better in villages than in large

cities. Water supply is almost universal, electricity supply even more so. The housing quality of the most vul-

nerable groups in rural areas (Roma population, aged persons) is very poor.

Health care in principle is accessible to everyone. Some of the small and underdeveloped villages or even towns,however, have difficulties in finding general practitioners or paediatricians. The number of patients per doctors ishigher in the less developed regions of the country.

Although most of agriculture and farming is in villages, the decline of the contribution of agriculture to the eco-nomic performance of the country has led to the diversification of economic activities in villages, too. The diver-sification in villages, however is not yet adequate, development plans therefore aim at growing diversification,in order to provide higher quality of life in villages

The situation of women in villages is worse among rural women in those dimensions where the rural populationis less favoured than the urban population. Women in villages have lower disposable income than in towns, but thatis true for the rural population in general. Old women in villages, however are a specially disfavoured group astheir pensions are much lower because in the past the labour force activity and consequently the social security

153

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

contribution period of rural women was much lower than of urban women.

Roma ethnicity means a much higher risk of poverty and social exclusion. Besides higher income poverty per-centages (estimates vary between 35–55 %), the Roma live under worse housing conditions, their health status isworse and life expectancies are lower, activity rates among the Roma are low, child poverty is especially highbecause of larger numbers of children in Roma families. On the whole the data show that much higher proportionsof the Roma live in poverty and are socially excluded than of the non-Roma population. Moreover, the most impor-tant predictors of poverty and social exclusion (low educational attainments, large family and household sizes, badhealth status etc.) are concentrated in the Roma, and especially in the rural Roma population.

On the whole, the fact that social policy decisions are taken at the central level, means that there is little flexi-bility of programmes and that special local needs are difficult to meet, although the local actors, i.e. authorities,experts, care providers are in the best position to identify local needs. On the other hand, because the local author-ities have little or no means of allocating resources to programmes they may draw up themselves, there is littleincentive for local social policy thinking. The enterprises situated in the settlement pay a 2% tax on turnover andthe communities can levy real estate. This however increases the gap between backward and more developedregions and settlements.

Village janitors work in small villages, their task is to assist village dwellers and those who live in remote areasin their everyday life. Although case studies have found that that some of the village janitors do not have sufficientequipment (the vehicle may not be large enough, some of them may not have a telephone or other office equip-ment) and that some of the smallest villages and a small proportion of the poorest and most excluded people areunder serviced, the performance of village janitors is, on the whole, good and the population they service is, in gen-eral, satisfied by the quality of the services. The main problem is that many villages that are above the size limit

of central government financial provision, cannot afford to employ village janitors, although there would be

a great need for such services.

In terms of rural development, the agricultural welfare plot programmes have a number of advantages. Local

policy has expanded with a new and flexible element, the path to social integration can be paved for excludedfamilies, due to its productive nature, these programmes are much more accepted by the population at large thanpassive welfare transfers, the burden of long-term unemployment can be at least partially decreased, importanthuman relation and interactions are maintained which are necessary for the social inclusion of disadvantaged fam-ilies, important human and natural resources are activated

154

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

7. References

CSO (2004) A szegénység és a társadalmi kirekesztödés folyamata. (The process of becoming poor and socially exclud-ed). Central Statistical Office, Budapest

CSO (2005a ) A népesség és a lakások jellemzöi (Characteristics of the population and of dwellings). Microcensus 2005.Central Statistical Office, Budapest

CSO (2005b) Demographic Yearbook of Hungary. Central Statistical Office, BudapestCSO (2006a) Statistical Yearbook of Hungary. Central Statistical Office, BudapestCSO (2006b): Jelentés a Változó Életkörülmények Adatfelvétel 2005-ös hullámáról. (Report of the 2005 wave of the

Survey Changing Circumstances of Life /SILC/). Central Statistical Office, BudapestCSO (2006c): Jövedelmi helyzet, jövedelemeloszlás, 2004 (Income situation and income distribution, 2004). Central

Statistical Office, BudapestCSO: Yearbooks of Regional Statistics of Hungary. Central Statistical Office, BudapestData base of regional statistics, Central Statistical Office.Data base of the Employment Authority of the Ministry of Employment and Social Affairs.Hegedüs, P. – Monostori, J. (2005): A szegénység és a társadalmi kirekesztödés jelzöszámai (Indicators of poverty and

social exclusion). Demographic Research Institute, BudapestKapitány, B. – Spéder,Zs. (2004): Szegénység és depriváció – Társadalomszerkezeti összefüggések nyomában (Poverty

and deprivation – structural aspects). Demographic Research Institute, BudapestLegyen jobb a gyermekeknek, Nemzeti Stratégia, 2007-2032. (National Strategy against child poverty, 2007-2032.) Draft.

Government of the Republic of Hungary. Budapest, 2007.National Strategy Report on Social Protection and Social Inclusion, 2006-2008., Hungary. http://ec.europa.eu/employ-

ment_social/social_inclusion/docs/2006/nap/hungary_en.pdfNew Hungary Rural Development Strategic Plan, 2007-2013. Ministry Of Agriculture And Rural Development,

Budapest, January 2007.

155

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Annex

The distribution (%) of the Roma and non-Roma population between settlements of various sizes

Settlement size Roma Non-Roma Total

– 1 000 16,0 7,2 7,4

1 001 – 2 000 16,6 9,5 9,7

2 001 – 5 000 16,8 13,9 14,0

5 001 – 10 000 12,1 8,5 8,6

10 001 – 20 000 11,6 10,1 10,2

20 001 – 50 000 11,6 13,6 13,6

50 001 – 100 000 9,2 18,8 18,6

100 001 + 6,1 18,2 17,9

Total 100,0 100,0 100,0

Distribution (%) of the Roma and non-Roma population by marital status in urban and ruralsettlements

Cities and towns Villages

Marital status Roma Non-Roma Roma Non-Roma

Currently not married and not cohabiting 19,8 22,4 13,8 18,5

Married 48,9 52,4 50,8 58,5

Unmarried cohabiting partner 19,5 8,5 23,4 7,1

Divorced/separated 5,2 9,3 7,2 6,4

Widow 6,5 7,4 4,7 9,5

Total 100,0 100,0 100,0 100,0

Distribution of the Roma and non-Roma population by activity status in urban and rural settlements

Cities and towns Villages

Activity status Roma non-Roma Roma non-Roma Total Total Roma Total non-Roma

Working 34,4 55,5 20,8 46,7 51,8 27,4 52,5

Unemployed 19,2 4,1 23,8 6,9 5,5 21,6 5,1

Old-age pensioner 5,2 20,1 8,0 22,0 20,3 6,6 20,7

Disability pensioner 12,3 7,2 13,5 10,4 8,5 12,9 8,3

Maternity benefits 13,0 3,1 14,6 4,2 3,8 13,8 3,5

Student 2,1 6,7 1,3 3,8 5,6 1,7 5,7

Other inactive dependent 13,8 3,3 17,9 6,0 4,5 15,9 4,2

Total 100,0 100,0 100,0 100,0 100,0 100,0 100,0

156

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY

Distribution (%) of the Roma and non-Roma population by number of employed persons inhousehold in urban and rural settlements

Number of employed Cities and towns Villages

persons in household Roma non-Roma Roma non-Roma Total Total Roma Total non-Roma

0 46,2 23,9 62,4 30,4 26,9 54,6 26,1

1 37,4 30,8 28,5 30,0 30,6 32,8 30,5

2 13,2 33,3 6,3 27,6 30,8 9,6 31,3

3 3,1 9,0 2,4 8,8 8,8 2,7 8,9

4 2,8 0,5 2,7 2,7 0,3 2,7

5 0,2 0,5 0,3 0,3

6 0,0 0,0 0,0

Total 100,0 100,0 100,0 100,0 100,0 100,0 100,0

Distribution (%) of the Roma and non-Roma population by availability of WC and shower orbathroom in urban and rural settlements

Is there a WC and a shower Cities and towns Villages

or athroom in the dwelling? Roma non-Roma Roma non-Roma Total Total Roma Total non-Roma

Yes 62,7 96,0 49,6 88,9 92,5 55,9 93,6

No, would like to have it but cannot afford it 31,4 3,2 47,7 9,4 6,2 39,8 5,3

No, there is no need for it 1,0 0,2 0,5 0,3 0,3 0,7 0,3

No, for other reasons 4,9 0,6 2,3 1,4 0,9 3,5 0,9

Total 100,0 100,0 100,0 100,0 100,0 100,0 100,0

157

Poverty and social exclusion in rural areas - Final report Annex I - Country Studies

HUNGARY