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Pérer Schmidr, MorIin Borrenber9er (Edirors)
Growing Up
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Heolrh oF Children ond Juveniles
Ggerrrrekek és Fiorolok egészsége
Magyar Tudományos
Akadémia
Hungarian Academy
of Sciences
Imprint:
Growing Up Under Globalisation:
Heahh of Children and Jweniles and the Relation to Globalisation
Péter Schmidt, Martin Barlenberger (Editors)
DocumenÍation of a conference held in Győr on 1 2 November 20 I 0
(w w v. c lub ofr o me. a t/ 2 0 I 0
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Publisher:
European Support Centre oÍthe Club ofRome
Hmgarian Ássociation oÍ the Club of Rome
Austrian Chapter of the Club of Rome
The gopyight remains with the editors and authors.
Reprint or re-publication on a w ebsite requires a written perrnission
by the editors or (re-publication ofindividual articles) by the authors.
Club ofRome - European Support Centre
Tuchlauben 8/15, 1010 Vienna
www.cluboÍrome.at
Stifttmgfíir eine gegmde Generation - Győr
Egészséges N emzedé Mrt Alapíndny,Győr
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Possibilities of Earning Living of Young People Before and After
the Sub-Prime Crisis
Csaba Lentner
Demographic trends in Hungary (1949 - 1990 - 2009)
The collapse of the American subprime mortgage market lead to a severe economic
crisis all over the world. Economic conditions fundamentaly influence the vision of
the society and its younger generations. Hungary, member of the European Union,
is in a special situation. After the fourty-year domination of the planned economy,
the country has been building a market economy from the late eighties onwards.
However, the past 20 years brought disastrous demographic changes. The
population of the younger generations is decreasing and their chances are
drastically deteriorating. From the start ofthe planned economy system until 1990,
the population of Hungary grew by l2.lyo, or 1,170,000 people. At the same time,
the distribution of age groups rearranged. While the rate of children under 14 years
was 24.9Yo in 1949, it fell to 20.5% by 1990. This phenomenon was accompanied
by the total population declining by 159,000. The rate ofthose older than 60 years,
which is practically the age when most Hungarian people retire, rose from I 1.7% in
1949 to 18.90Á in 1990. Quantifiably' the number of people belonging to the older
generation grew by 887,000 during the four decades of the planned economy
system.
Nevertheless, the demographic tendencies became even more worrisome amid the
conditions of the market economy. Between 1990 and 2009 the total population of
Hungary dropped by 344,000, despite significant migration from specific parts of
the neighboring countries inhabited by Hungarians. Over a period of 20 years, the
number ofchildren under 14 fell by 638,000. These data give food for thought in a
country of only 10 million people. Fewer and fewer babies are born, the age
composition of the society is shaping unfavourably, which could lead to the
collapse of the pension scheme, and may cause problems in the labour market.
Demographic statistics also prove this adverse process. The aging index was 30.3%
in 1949, 88.5% in 1990, and 109.9% in 2009. The aging of the population
proceeded after 1990, the number ofpeople older then 60 years grew by another
264,000, so their proportion in the total population is now 22.2%. Out of the total
population of 10 million, 3.1 million people are pensioners, while the un-
employment rate is 27.3Yo among those befween 15 and 24 years, similar to the
30Yo average data ofthe European Union. The demographic changes predict serious
problems in the labour market. And as already known (Lentner, 2010) health and
skills of labor is an important competitiveness factor.
Causes of the demographic changes
With a comprehensive approach, three factors can be raised as theoretically possib-
le causes. One of them is the level of the public health service. The fetal losses ratio
per l00 live births was l47.3oÁ tn 1970,86.50Á in 1990, and 62.3%o tn 2008.
Abortion ratio per 100 live births was 126.1% in 1970,719% in 1990, and 44.5%o
in 2008. Average life expectancy developed favourably as well: among men, 66.3
years in 1970,65.1 years in 1990, and 69.8 years in 2008, while among women it
rose from 72.1 to 13.7, and then to 77.8 years. Although average life expectancy in
Hungary still lags far behind that of the developed market economies, the above
data can generally be traced back to the development ofthe public health service,
the rise of the standard of living, and the procedure of family planning getting more
conscious and deliberate. However, Hungarian governments devote enoÍTnous
energy to rnging the people to live a healthy lifestyle ( Schmidt, Feher 2010).
Another cause could be the the prevailing of the international tendencies (see
Maddaloni et al. 2006). It is empirically verifiable that the Hungarian population is
becoming too comfortable, adult members of the society prefer self-realization,
often considering a baby too much of a burden. A deeper analysis of this topic is no
subject ofthe present study, besides, I am convinced that it is not an essential cause
of the Hungarian society's demographic problems. It is a fact that the dependency
rate is deteriorating apace: young people of working age aÍe fewer and fewer' while
the number of the retired is growing. Total dependency rate was 51%o in 1990, and
it dropped to 45,40Á by 2009 . It can easily be proven that there are economic factors
in the background of the worsening Hungarian demographic situation.
The future of the younger generations
We're facing a complex question when examining the life opportunities of the
younger generations in Hungary. In this subject, Hungary and the developed market
economies should be discussed separately. Hungary, whilst part of the European
Union and already integrated into the international markets, has not yet caught up
with the developed countries, either from the aspect of financial stability or the
eamings of the people. Consequently, when atalyzing the Hungarian demographic
situation, those factors having an impact in Central or Western Europe cannot be
automatically applied to the Hungarian footing.
State and corporate finance in the developed countries do suffer from the crisis, and
the families indeed face rapid deterioration in living standards. But in these
countries the chances of the younger generations may significantly improve if the
state leaders end the lack of regulation, stick to a responsible economic policy, and
even adjust or rectify the decisions of the market players, if necessary. Financial
markets should be supervised more strictly than they used to be, and the states have
the right to do it. National budgets must be stabilized, there is great need for
cieatiíg jobs, in which the states may have an important role. The economic theory
of JohriM. Keynes is existing practice again, as the governments of the developed
countries did a lot in order to piotect;obs during the crisis. Moreover' new theories
were set up, calling for abolishing poverty all over the world (Pauli, 2010). All
these changes should have a positive impact on the future ofthe young.
EconomictlackgroundoftheHungarianyouthoslifeopportunities
The worrisome economic conditions have a decisive role in the deterioration of the
demographic sihration, since it has a great influence on the chances of the whole
so"ieiy. burng the past 20-25 years Hungary became integrated in the Western
market economy system, but it did not catch up with the standards of the developed
countries: it is stili an indebted country poor of capital and energy, struggling with
,t o",*a problems of its economy, low employment rate and decreasing living
standard. itttrougtr there's no question that products and services generated
nowadays in Hungary are ofa higher standard than2o or 25 years before, but the
business and sociál gains of this fact does not appear in the state budget and the
income level of the population proportionately. Actually, it lags far behind the level
of the Western European and North American countries'
The liberal economic course unfolding from the seventies has come to an end with
the global crisis. Its main features were limited state supervision, reduced market
control and the state as an owner being underplayed. In this world order, the only
relevant measure of a national ""ono-y was bow much capital it could attract to be
invested by multinational corporations. In the coming decades, the principal
measure ofefficiency will be that how much of this network of relationships can be
"*pl"it"a to the benefit of the national budget and the society. Governments'
u"iiuity will be required in forming the national economic policies. The problems in
H;"g;.y are particu1ary worrying, because public Íinance had already become
,ro.t'uté, comianies *á ho.'."ioús had faced serious liquidity and debt problems
U"for" tfr" glotal crisis broke out. The economic policy of the past 20 years since
the change-of regime can be charactetized by excessive liberalism and national
p.op..ty""ut.n ,ip. rhe disintegration of the society fighting with everyday
;;ói"Á' of livelíhood points to tÉe
fundamental crisis of the change of regime that
demoralizes the society and spoils the chances of the families'
The govemments of the 21.tcenhrry have to be active players of the economy. It
was i misbelief that the market would resolve everything and the market players
are able to create balance on their own. During the transformation of the Hungarian
""ooo*y, liberalization, deregulation and privatization were all brought off too
fasl which weakened the stat! and the national budgetl not least lead to society-
wide confusion in values and to difficulties of livelihood'
By developing the internal economy and the small and medium sized enterprises,
the employment rate should significatly improve. It can imply the domestic
effective demand as well as the living standards rising, giving new chances to
families. The greatest obstacle to startíng a family is the lack of regular, calculable
income. It was an overly swift change for the Hungarian society as the safety of the
planned economy was replaced by the unpredictabilify of the liberal market
economy. Health care as well as education have always been granted limited
resources by the national budget, and have been inefficient either, but public
services should still not be considered as the main cause of the demographic crisis.
The youth in Hungary will have positive prospects when the process of the change
of regime is fixed, the primary reforms are reconsidered and the reorganization of
public services is finally started. That is what distinguishes the crisis and therefore
the appropriate crisis management of Hungary from that of the developed countries.
The task is not only to manage the crisis unfolding after the collapse of the
subprime mortgage market, but also the follow up correction of the misguided
economic transition of the past 20 years. The condition of the society and thus the
younger generations can improve if the problems are solved jointly. And the young
do feel these problems: researches lead by Erzsébet Novaky (20l0) show that 6|0Á
of secondary school students do not see their future in Hungary.
Hungary has to be prepared for fresh challenges. Approximately 10% of the
population, I million people, belongs to the Roma minority. If the tendencies
previously atalyzed do not change, the population of Hungary will soon fall to 8
million, of which the Roma will come to 2 million. The Roma live in great poverty,
they are undereducated and face difficulties at the labour market. Most of them are
caught in a poverty trap, get regular social assistance, occasionally more than the
minimum wage. Their living conditions and state of health is worrisome, they live
15 or 20 years less than the Hungarian majority. In certain regions, 70-80% of the
Roma population are unemployed. It is already the third generation affected by
high unemployment, as many Romas were sacked in the second half of the eighties,
when the socialist industry broke down, and no new jobs or traning programs were
offered them ever since. This situation must be reversed, the Roma population must
be integrated. Their misery and distress is a disgrace to the Hungarian society.
From the poverty treating policy ofthe past2} years, the government should shift
to a social policy capable of creating a homogeneous nation, which can be achieved
by restructuring the economic policy.
In order to improve the chances ofthe younger generations, jobs must be created,
either in the high{ech industry or in the mass production sectors. Only that may
give them vision to stay and work in Hungary. Without such changes, future
success is unthinkable. Families have a fundamental role in improving the chances
of the young. State-run drug prevention programs and addiction treatments can not
efficiently handle the deviant behavioral models so prevalent among youngsters.
Family as the basis element of society has to prevent declassing. It is necessary that
the households have enough income, the adult members of the families all have a
job, so that the children live in a stable family model. It can be reached by the
means of a successful economic policy that also places emphasis on the distribution
of income (Gini coefficient). Social safety should arise from personal efforts, the
responsibility of the family can not be assigned to the state. Chaos should be
switched to prosperify with the help of an economic policy that allows more
proportionate distribution of incomes than presently. Families can bring up
offsprings safely amid stable, calculable existential conditions.
Conclusions
The future, the number and the proportion of Hungarian young people have seen
catastrophic tendencies after the change of regime, during the two decades of
market economy. The problems originate in an immoderately liberal economic
policy mismatching the Hungarian conditions, and, consequently, a poor social
policy. Apart from managing the problems that lead to the subprime mortgage
crisis, the fundamental crisis of the change of regime and the misguided primary
reforms need essential correction. Integrating the Roma population into the labour
market and thus the Hungarian society is the main social challenge of the 21"
century. The future of the Hungarian youth as well as the Romas stands or falls by
reconstructing the economic policy of Hungary.
References
Lentner, Cs. (2007): The Health Care System as a New Competitive Factor in the Light of the
Convergence Programme, In. Hungarian Medical Joumal, Intemational Edition (Separatum),
Budapes! Hungary, pp. 97 -107.
Schmidt, P. _ Fehér, J. (2010): Health Education and Healt}r Promotion - Determinative
Conditions and Requirements for Realising the Public - Health Programme of the Future, In.
Economy and Society Leamed Paper, WSUF, Budapest, pp. 148-157.
Pauli, Gunter (2010): The Blue Economy, Paradigm Publication, New Mexico.
Maddaloni, A. - Musso, A. - Rother, P. et. al. (2006): Macroeconomic Implications of
Demographic of Demographic Developments in the Euro Are4 In. ECB Occasional Papers
51. /August, Frankfurt am Main.
Novaky, E. (2010): Hungary in 2025, Hungarian Economic and Social Council, Budapest.
