Regional labour market problems – does foreign employment aggravate the situation of north-eastern regions in Hungary?

Abstract

In recent years, the number of people working abroad has increased in parallel with the favourable trends of the Hungarian labour market. The intensity of outward labour mobility reflects low domestic wage levels, but there is also a general disparity between skills demanded and skills offered in the Hungarian labour market, resulting in a combined presence of labour shortages and unemployment, especially in the less developed regions.

The two least developed regions of the country, Northern Hungary and the Northern Great Plain continue to struggle with unemployment and a low level of economic activity. A shortage of labour becomes an increasingly serious problem because of lacking or ill-matched qualifications and migration of labour from these regions.

The paper provides an overview of the regional differentiation of the Hungarian labour market. It throws a focus on the economic factors stimulating the more intensive migration in the northern and eastern regions. At the end of 2017, the authors conducted an empirical survey among workers in the two most disadvantaged Hungarian regions to measure their willingness and motivation to migrate. How attractive was working abroad for people in these less developed areas? 1567 employees of 52 companies completed a questionnaire. Snowball sampling was used, and the results were examined by descriptive and relationship methods.

Of the 1567 employees, 16.4% had experience in working abroad, their return to Hungary was motivated by family reasons. Regarding cross-border mobility, over one third (34.9%) of the respondents would consider the possibility of working abroad, with the opportunity of higher wages being the main motivation. Based on previous empirical research, basic assumptions about the relationship between cross-border mobility and the individual socio-demographic characteristics of workers can be made. A significant correlation can only be observed with regard to age and time spent at the employer organisation, while gender, vocational qualifications, remuneration and the form of employment of the respondents did not significantly influence any intent to migrate.

Those formerly employed abroad showed a higher willingness to move. In the less developed regions of our country, working abroad is only a distant thought. However, our empirical survey suggests that potential migration of younger generations in the lagging regions may further exacerbate regional differences.