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Chapter AThe economic and social environment of education
Chapter A
The economic and social environment of education
1. About Hungary
The Republic of Hungary is situated in Central Europe, with a population (1996) of 10,212,000. Its territory covers 93,000 square kilometres, which is about one per cent of Europe. 12.6% of the population live in towns, and 18.7% in the capital city of Budapest. Hungary is a fairly homogenous country in its ethnic composition: 96% of the population are Hungarian, who speak the Hungarian language (this language is fairly unique in the region, as it belongs to the Finno-Ugrian language family). The major groups of national minorities are the following: Germans, Slovakians, Serbs, Croatians, and Slovenians. The biggest ethnic minority is the Romani, or Gypsy, whose number is estimated to be some half a million. The number of Hungarians living in a diaspora abroad is about 5 million, of whom some 2.5 million live as an ethnic minority in neighbouring countries, mainly in Romania and in Slovakia. Similar to the other post-communist countries a religious revival can be witnessed in Hungary since the change of the political regime in 1989/90, but it is difficult to estimate the number of religious people. One guideline in making a rough estimate of this number is that in their income tax declarations for 1997 citizens could contribute one per cent of their tax to the denomination of their choice. 11% of the 4.5 million tax payers (about half a million citizens) decided to do so for 55 different churches or denominations. The Catholic Church was supported by the biggest number (about 62%), followed by the Calvinist Church with 18%. This data, however, has to be treated with caution as the taxpayers do not include those not in direct employment, who constitute the majority of the population.
Hungary is a parliamentary democracy with a one-chamber Parliament. The system of political parties has been in constant transformation ever since the one-party political system was abolished. Following the first democratic elections after the change of the regime in 1990 a conservative government coalition was formed with a Christian-democratic orientation, led by the Forum of Hungarian Democrats. The elections of 1994 produced a victory for the Hungarian Socialist Party, which formed a socialist-liberal coalition when coming to power. After the elections of 1998 a centre-right government was formed by the Fidesz-Hungarian Civic Party. The power of the President of the Republic in this system is fairly limited. The Constitutional Court has been an important player on the political scene since the change of the regime.
The population has been in decline since the 1980s, Hungary is an ageing country. The ageing index (the proportion of people over 60 as compared to the less than 15-year-old) has grown from 54.3 in1960 to 108.1 by 1996. In 1960 one quarter of the population (25.4%) were under 15, and only 13.8% were over 60. However, by 1996 the number of the old exceeded the number of the young (the proportions were 19.4% and 18.0%). The main reason for this can be found in the decline in the birthrate. The number of births reached its peak in 1975, then decreased radically until 1984 when it stabilised around 120,000. At the beginning of the 1990s the birth rate started to decline again and the rate of decline has increased rapidly ever since. While there were 124,000 live births in 1990, there were 114,000 in 1994, and only 106,000 births were registered in 1996. (For the changes in the numbers born between 1975 and 1996 see Figure 1.)
The reasons for the unfavourable data in demography and in the health conditions of the population may partly be sought among the dramatic social, economic and political changes that have occurred in Hungary in the 20th century or at least in the past decade. The country entered the 20th century as part of a middle-size European empire (The Austro-Hungarian Monarchy) and lived through not only the two world wars (like the rest of Europe) but, as a consequence of the wars, it lost some two-thirds of its population and territory, and witnessed a change in the political regime on eight occasions. The last of these, the 1989/90 upheaval in world politics and the collapse of the Soviet empire, have brought about changes (transition from a monolithic political structure to a parliamentary democracy, and from a Soviet-type planned economy to a market economy) that are considered by analysts both abroad and in Hungary to be favourable, opening up new, promising horizons for the country. Yet, for the majority of the population, they often entail difficult changes and choices.
The numbers of the age-groups born between 1975-1996, on 1st January, 1997
Source: Statistical Yearbook of Hungary, 1995, and the data of the Central Statistical Office
Note: The 1996 data is a rounded estimate
2. Economic situation, educational expenditure
The Hungarian economy started the transformation into a market economy with a fairly mixed legacy at the turn of the last decade. As compared to the other countries in a similar situation our circumstances could be perceived as being more advantageous: due to a process of reforms and to the former economic policy, Hungary had advanced much further in winding up the shortage-economy than the rest of the countries of the Soviet bloc. It was also an advantage compared to the rest of these countries that people in Hungary had relatively wider and longer experiences with markets and enterprises. The transition was helped by the presence of an educated, well-trained labour force, although this is a characteristic which holds true for the other Visegrád countries (for example the Czech Republic and Poland). The level of education had been gradually improving, even though almost half of the population still did not have more than the eight-year general school as the highest educational qualification in 1996. (See Table 1.) The most radical improvement may be perceived among wage earners: in 1996 four-fifth of them had an educational qualification higher than the eighth-grade general school while the corresponding proportion in 1990 was roughly two-thirds (see Table 2). The level of educational qualifications among wage earners has improved so dramatically due also to the workforce with the lowest qualifications having been forced out of the labour market, i.e. they have retired or become unemployed (see this in more detail later).
The Hungarian population aged 15 and over according to their highest educational qualification, 1960-1996 (%)
|
general school |
completed |
total | ||||||||||||||||||
| grade 0 | grades 1-7 | grade 8 | technical school and trade school |
upper secondary school |
higher education | |||||||||||||||
|
|
||||||||||||||||||||
| 1960 | 3.3 | 63.8 | 24.3 | - | 6.2 | 2.3 | 100.0 | |||||||||||||
| 1970 | 2.0 | 46.6 | 31.1 | 5.5 | 11.1 | 3.7 | 100.0 | |||||||||||||
| 1980 | 1.1 | 32.8 | 32.8 | 11.0 | 16.5 | 5.8 | 100.0 | |||||||||||||
| 1990 | 2.1 | 20.7 | 35.6 | 15.0 | 18.7 | 8.8 | 100.0 | |||||||||||||
| 1996 | 0.8 | 14.0 | 33.5 | 18.9 | 22.7 | 10.1 | 100.0 | |||||||||||||
Source: Szukicsné, 1993; Microcensus, 1996.
Note: For school types see Chapter C/1.
Active earner population by level of highest educational qualification, 1960-1996 (%)
|
general school |
completed |
total | ||||||||||||||||||
| grades 0-7 | grade 8 | technical school and trade school |
upper secondary school |
higher education | ||||||||||||||||
|
|
||||||||||||||||||||
| 1960 | 64.9 | 24.7 | - | 7.2 | 3.2 | 100.0 | ||||||||||||||
| 1970 | 39.0 | 34.1 | 7.8 | 13.9 | 5.2 | 100.0 | ||||||||||||||
| 1980 | 18.5 | 35.4 | 16.9 | 21.1 | 8.1 | 100.0 | ||||||||||||||
| 1990 | 5.2 | 33.4 | 24.2 | 24.8 | 12.3 | 100.0 | ||||||||||||||
| 1996 | 1.1 | 20.2 | 30.6 | 31.3 | 16.8 | 100.0 | ||||||||||||||
Source: Szukicsné, 1993; Microcensus, 1996.
The change in the gross domestic product is one of the most important macro-economic indicators, which clearly illustrates the general state of the economy (see Figure 2). The initial decline in the GDP is a general characteristic of the transitional period in Eastern Europe. Growth picked up slowly after 1993, and the annual growth rate moved into the 1-2% bracket. Yet still only 85.1% of the 1987 GDP was produced in 1996. After a growth rate of 4.4% in 1997, a similar rate of growth - 4.5% - is forecast for 1998.
Changes of real-value GDP in Hungary, 1987-1996 (1987 = 100%)
Source: Hungarian Statistical Yearbooks, 1988-97, Central Statistical Office
* Forecast.
Transformation of the ownership structure. Hungary in the 1990s can be characterised by a far-reaching transformation of the economic infrastructure (the infrastructure of a market economy is being gradually created) and a large number of changes are taking place at the micro-level as well. Of the latter the privatisation of the state properties and the mushrooming of the new enterprises - i.e. the changes in the ownership structure - have been the most significant. As a result of these processes the Hungarian economy, where formerly state ownership prevailed, has gradually been transformed into a market economy where private ownership dominates. (See Table 3.)
Double accountancy companies (excluding the fiscal sector) by the added value produced and by ownership sub-category*, 1992-1995 (%)
| 1992 | 1993 | 1994 | 1995 | |||||||||||||||||
|
|
||||||||||||||||||||
| added value | ||||||||||||||||||||
|
|
||||||||||||||||||||
| public/state | 55.7 | 41.9 | 34.8 | 27.1 | ||||||||||||||||
| domestic, private | 34.5 | 41.7 | 44.6 | 48.0 | ||||||||||||||||
| foreign | 9.8 | 16.4 | 20.6 | 24.8 | ||||||||||||||||
Source: Statistical Yearbook of Hungary and Pocketbook of Hungarian Statistics, 1992-1996.
* The ownership sub-category is defined by the type of the majority owner.
By the mid-1990s the number of companies with majority public ownership gradually diminished. By 1994 these companies employed only slightly less than one-third of the labour force and produced a little more than 30% of the added value. The number and the added value of the majority foreign owned companies increased considerably. By 1996 it was these companies that produced some one-fourth of the added value (and their high productivity is revealed by the fact that they employ only 14.5% of the labour force). They are having an important impact on the growth of exports and they play a major role in the transmission of a technological and production culture that contributes to the modernisation of the economy and to the dissemination of market economy principles and behaviour. Since the beginning of the transitory period the traditional institutions of a market economy (capital market, stock exchange, two-tier banking system, etc.) have also come into being and have become more and more active.
The state of public finances. By 1994 the deficit in the total government expenditure amounted to a dangerous 8.4% of the GDP. In 1995, the government responded to this with the Bokros Package, named after the then minister of finance, which introduced severe restrictions in fiscal policy. The package contained measures both for the raising of state revenues and for cuts in spending. The planned saving measures in social welfare spending were either rejected by the Constitutional Court or did not result in significant saving. On the other hand, the measures concerning the numbers and real salaries of public employees were carried through and had a severe impact on teachers, the largest group of public employees (see also Chapter E, which deals with the school personnel). Nevertheless, due to the stabilisation of 1995 the government managed to keep the public deficit at a controllable level in 1995 (6.4%) and to push it down to around 3% by 1996. These processes, however, strongly affected government expenditure as a whole.
Concerning educational expenditure as a proportion of GDP, it can be said to have exhibited some stability up to 1994. Since then, however, there has been a proportional decline (see Table 4 and Chapter B on the administration and financing of education, and on educational policy).
Government outlays as a percentage of nominal GDP,
1990-1996 (functional breakdown)
| 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996* | ||||||||||||||
|
|
||||||||||||||||||||
| Total expenditure | 63.0 | 64.9 | 61.4 | 61.1 | 64.0 | 57.8 | 54.3 | |||||||||||||
| of which: | ||||||||||||||||||||
| General administration | 2.5 | 2.6 | 3.3 | 3.3 | 3.7 | 3.2 | 3.2 | |||||||||||||
| Defence | 1.6 | 1.8 | 1.6 | 1.5 | 1.4 | 1.0 | 1.1 | |||||||||||||
| Public order and safety | 4.3 | 7.0 | 6.0 | 9.8 | 9.5 | 7.0 | 7.9 | |||||||||||||
| Education | 5.6 | 6.4 | 5.8 | 6.9 | 7.5 | 6.5 | 6.0 | |||||||||||||
| Culture, religion | 1.4 | 1.6 | 1.9 | 2.3 | 2.2 | 1.8 | 1.5 | |||||||||||||
| Health care | 5.8 | 6.8 | 7.8 | 6.8 | 7.1 | 6.2 | 5.2 | |||||||||||||
| Social insurance (pensions) | 15.2 | 18.3 | 18.8 | 19.0 | 17.4 | 15.1 | 13.4 | |||||||||||||
Source: Lelkes, 1997.
* expected data
3. The re-structuring of the labour market, unemployment, youth unemployment
The economic activity of the population has undergone significant re-structuring since the end of the 1980s. The most important element of these changes is the dramatic decline in economic activity. The number of people in employment decreased by almost one and a half million between 1990 and 1996 (see Table 5). While in 1990 some 88% of the population of working age were employed, this rate sank below 62% by 1996. The unemployment rate was 11.7% in 1996. Yet the majority of those who lost their jobs did not become unemployed but left the labour market (e.g. took early retirement with the help of one of the early retirement schemes). As a consequence, the number of dependants soared: while there were 98 dependants per 100 employed, the corresponding rate of dependants rose to 173 by 1996, a growth of 76.5%.
Population and economic activity. Data from the beginning of the calendar years 1990-1996 (thousand people)
| 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | ||||||||||||||
|
|
||||||||||||||||||||
| total population | 10 375 | 10 355 | 10 337 | 10 310 | 10 277 | 10 246 | 10212 | |||||||||||||
| working age population | 5 957 | 5 997 | 6 032 | 6 057 | 6 071 | 6 082 | 6 081 | |||||||||||||
| in employment | 5 227 | 5 052 | 4 534 | 4 090 | 3 881 | 3 793 | 3 744 | |||||||||||||
| unemployed | 24 | 101 | 406 | 663 | 632 | 520 | 496 | |||||||||||||
| economically active | 5 251 | 5 153 | 4 940 | 4 753 | 4 513 | 4 313 | 4 240 | |||||||||||||
| economically inactive | 5 124 | 5 202 | 5 397 | 5 557 | 5 764 | 5 933 | 5 972 | |||||||||||||
| dependants | 5 148 | 5 303 | 5 803 | 6 220 | 6 396 | 6 453 | 6 468 | |||||||||||||
| number of dependants per 100 employed | 98 | 105 | 128 | 152 | 165 | 170 | 173 | |||||||||||||
Source: Pocketbook of Hungarian Statistics, '96.
The characteristic features of unemployment. Since the beginning of the mid-1980s the labour market positions of individuals have been increasingly determined by the educational qualifications possessed. Higher and secondary educational qualifications have been valued more and more while the value of a general school or a technical school qualification has greatly diminished. This process has only intensified since the change of regime. The relative earning positions of those with a higher qualification have improved, their chance to become unemployed is much lower than of those who have lower levels of schooling. People with only an eighth-grade general school certificate or lower are being driven out of the labour market for good. While in 1996 the rate of those who had at most a general school certificate was 38% among the unemployed, the rate of the same group among those in employment was 23%. At the other end of the scale the rate of unemployment among those with a university or college degree is only 4.4%, and among the employed they number 16% (see Figure 3).
Breakdown of working and unemployed population by highest educational qualification, first quarter of 1996 (%)
Source: Monthly Statistical Bulletin, Central Statistical Office.
It is another characteristic feature of unemployment in Hungary that the proportion of the long-term unemployed (those out of a job for more than a year) is high by international comparison. The number of unemployed looking for a job for more than a year rose from 19% to 50% between 1992 and 1996. Three-quarters of the long-term unemployed have an educational qualification lower than secondary, that is a qualification from the general school or from a technical or trade school for skilled workers. In the past few years the labour market chances of the very young and the older generation have deteriorated while there have not been significant changes among the middle-aged (see Figure 4).
Unemployment rates by age group, 1996 (%)
Source: Monthly Statistical Bulletin, Central Statistical Office.
Some of the unemployed are at the beginning of their working career. Those with a technical school certificate for skilled workers are the most numerous, though their proportion is decreasing. (For the types of schools see Chapter C on the education system).
4. Processes in society
Inequalities in incomes. The expansion of market conditions and the economic crisis that unfolded after the change in the regime have resulted in significant changes in the income distribution of the population and in the development of income inequalities. In 1988 the average income of the top ten per cent calculated by the per capita income in the household was 5.8 times more than that of the lowest. In two years this rose to 6 and has been rising ever since. By 1996 the richest had an average income 7.5 times bigger than the poorest. This growths is mainly due to the fact that the incomes of people in the upper 10 per cent have grown faster, while the majority of the society have grown poorer since the change of the regime.
Poverty threatens those families most where the number of dependants is high, or where one of the earners becomes unemployed. It is not only the occupation but - to a growing extent these days - the type of educational qualification as well, that will determine the relative poverty or wealth of the workers concerned. In 1992 the probability of becoming poor for university graduates was half as much as for the average, and four years later a degree definitely provided a shield against poverty. The proportion of the poor among those with a secondary school leaving certificate decreased a little in the examined period: in 1992 12% of those with a secondary school leaving certificate belonged to the poorer strata of society, while in 1996, the figure was only 9%. The number of the poor among skilled workers is close to the national average, while one quarter of the unskilled remain poor.
Looking at poverty by settlement type, we can perceive the gap widening between the capital (Budapest) and the rest of the country. Since 1992 the number of the poor in Budapest has decreased significantly (from 13.3% to 5.3%) while the rest of the settlement types have kept their former relative position: the likelihood of facing poverty in the counties is lower than the average, poverty among small town-dwellers is about the national average, and between one-quarter and one-third of the people living in villages belong to the poorest. The inhabitants of the North-Eastern region are the poorest: almost every third person living in this region can be perceived as being poor (see Table 6).
The rate of the poor in various demographic categories, 1992-1996 (%)
| Demographic categories | People with per capita income belonging to the lowest 20% of incomes |
|||||||||||||||||||
| 1992 | 1996 | |||||||||||||||||||
|
|
||||||||||||||||||||
| Type of settlement | ||||||||||||||||||||
| Budapest | 13.3 | 5.3 | ||||||||||||||||||
| county seat | 16.6 | 19.2 | ||||||||||||||||||
| Town | 20.1 | 19.4 | ||||||||||||||||||
| Village | 27.1 | 28.1 | ||||||||||||||||||
|
|
||||||||||||||||||||
| Region* | ||||||||||||||||||||
| Budapest | 13.3 | 5.3 | ||||||||||||||||||
| Trans-Danubia/West | 14.5 | 17.1 | ||||||||||||||||||
| The Great Hungarian Plain | 21.5 | 29.1 | ||||||||||||||||||
| North-East of Hungary | 31.9 | 35.0 | ||||||||||||||||||
|
|
||||||||||||||||||||
| Age | ||||||||||||||||||||
| 0-2 | 40.1 | 42.4 | ||||||||||||||||||
| 3-6 | 42.9 | 37.7 | ||||||||||||||||||
| 7-14 | 33.7 | 32.7 | ||||||||||||||||||
| 15-19 | 29.8 | 30.4 | ||||||||||||||||||
Source: Andorka-Spéder, 1997.
* Calculated by Matild Sági.
There are some peculiar correlations between poverty and the size of the family or the number of children in the family. About the size of the Hungarian families in general: more than one-third (1,114,000) of all households (3,870,000) in 1996 comprised one person (of whom 70% were retired persons). There are no children in one-third of the families, there is one child in another third, and there are more than one children in the last third (data of the 1996 micro-census). The number of children per 100 families is 109. The number of children per 100 families is the highest (112) in the families where all the adults are unemployed: more than double the average number of children live in such families. Nevertheless only 4% of all children are raised in families like this since the number of such families is low (2% of all families).
There are almost 6 times as many children living in the poorest 20% of households, compared to in the richest 20%. The more school-age children live in a household, the poorer the household is likely to be. The situation is similar in the case of children attending a technical or a trade school: relatively five times as many technical or trade school students live in the poorest households as opposed to the richest ones. Children of better-off households tend to carry on with their studies in secondary schools. This tendency is reversed with students in higher education: there are relatively three times as many students from the richest households attending higher education than from the poorest ones. As far as spending on education is concerned, the richest 20% of households with dependent children tend to spend 4.5 times as much on the schooling of their children as the poorest households (see Table 7).
Breakdown of households with dependent children, by 5 income categories
|
Quintiles* |
||||||||||||||||||||
| 1. | 2. | 3. | 4. | 5. | ||||||||||||||||
|
|
||||||||||||||||||||
| per 100 households | ||||||||||||||||||||
| child at general school | 62 | 38 | 24 | 16 | 11 | |||||||||||||||
| child at technical or trade school | 10 | 7 | 5 | 4 | 2 | |||||||||||||||
| child at secondary school | 12 | 13 | 11 | 8 | 8 | |||||||||||||||
| child in higher education | 2 | 2 | 2 | 3 | 6 | |||||||||||||||
| Breakdown of general school pupils (%) | 41 | 25 | 16 | 11 | 7 | |||||||||||||||
| Breakdown of technical and trade school pupils (%) | 36 | 25 | 18 | 14 | 7 | |||||||||||||||
| Breakdown of secondary school students (%) | 23 | 25 | 21 | 15 | 15 | |||||||||||||||
| Breakdown of students in higher education (%) | 13 | 13 | 13 | 20 | 40 | |||||||||||||||
| Per capita educational expenditure in households with dependent children (HUF/year)** | 1430 | 2110 | 2740 | 3720 | 6150 | |||||||||||||||
Source: Calculated by András Sugár, 1997, based on the household statistics of the 1996 Microcensus.
* Column 1 stands for the poorest 20%.
** The educational expenditures listed in the household statistics include the following: textbooks, stationary articles, school fees.
5. Public opinion on education
Education is becoming a field people are more and more satisfied with. The negative opinions that are formed by those experiencing the internal crisis and the adaptation difficulties of the education system from within do not characterise society at large. According to most public opinion polls on education the majority of the Hungarian population are more or less satisfied with the educational services. A survey in spring 1997 showed that 9% consider the quality of education poor and a further 2% consider it very poor. The same survey places education the second when rating consumer satisfaction with the various public services, and this indicates a positive shift: education used to be the fourth in the satisfaction rating in 1990 but came second after the provision with goods in 1995 and 1997 (see Figure 5). The reason for this change is not only the actual rise in satisfaction with education but is also due to the fact that satisfaction with other public services has declined.
The level of satisfaction with the various public services, 1990, 1995 and 1997 (scale 1-5)*
Source: OKI - Szocio-Reflex Kft. 1990 and 1995; OKI - Marketing Centrum, May 1997.
* 1=least satisfied.
Yet people are not satisfied, to the same extent, with the various areas of education. While, for example, they esteem the preparedness of teachers highly, they are much less satisfied with pupil discipline, with the equipment of schools, and with the way the work of teachers is assessed (see Figure 6).
Public opinion on certain characteristics of schools, 1997 (scale 1-5)
Source: OKI - Marketing Centrum, May 1997. The question asked: How satisfactory do you find the following in Hungarian schools?"
In a 5-grade scale the population gave more than 3 to the quality of education, but it must be pointed out that the number of people holding a negative opinion of the quality of education has grown in the past few years. While in 1995 only 6% of those asked said that the quality of education was poor or very poor, their proportion rose to 11% by 1997. When asked how the quality of education has changed in the past ten years a smaller proportion of adults said in 1995 as opposed to 1990 that it had deteriorated or deteriorated badly. However, by 1997 the number of those who perceived the changes of the past period as negative rose again to the former level, and the number of those uncertain rose as well (see Figure 7). It should be added here that the questions asked in public opinion polls usually refer to the whole of the education system and not only to school education, and those surveyed do not necessarily distinguish between education and school education.
How has the quality of education changed in the past ten years?" Breakdown of answers (%), 1990, 1995, 1997
Source: Szabó, 1997.
It must also be pointed out that the satisfaction rankings usually reveal more about the demands of people than about the things they form an opinion of. Satisfaction with school education and assessing the importance of this field is often not independent of their social position: better qualified people and town-dwellers usually consider education more important, and are more satisfied with it, than the less qualified and villagers. The opinion formed on the work of teachers also depends on the type of location where those surveyed live: even though teachers are best qualified in the capital the opinion formed about them is the least favourable here. It is also worth pointing out that people living in villages have a worse opinion on teachers work than people in country towns. It should be noted furthermore, that people under 30 do not find education as important as the middle-aged generations.