The Lisbon strategy and the Hungarian employment strategy

László Kordás

29 April 2006

Balatongyörök

The European Employment Strategy

• 1997 – the process of Luxemburg– the beginning of the European Employment Strategy

• 2000 – the Lisbon process – the EU should become the most dynamically developing knowledge based economy by 2010

• 2005- revision of the Lisbon strategy

Employment objectives of the EU – the Lisbon strategy

By 2005• To raise employment rate to 67% • The employment rate of women should reach 57%

By 2010• The employment rate should reach 70%• The employment rate of women should exceed 60%• To raise employment rate of the elderly (aged 55-64)

to 50% • Structural funds used to implement the objectives

Revision of the Lisbon strategy 2005

• Objectives were not fulfilled, the relative backlog of the EU vs. Japan and the USA increased,• too many objectives• lack of comprehensive coordination.

Reaction :→ concentration of objectives and activities on economic growth and employment→ concerted economic and employment action plan

Reinforcement of the Lisbon Strategy

• New integrated guidelines → National Action Plan

1. Macroeconomic guidelines (fiscal policy, wage policy, sustainable pension and healthcare provisions, tax policy)

2. Microeconomic guidelines (strengthening internal market, establishing enterprise-friendly environment, developing infrastructure, R+D and innovation)

3. Employment guidelines

Employment guidelines

• 3 priorities – 8 guidelines• To increase labour market participation and to

modernise the social welfare systems.• To increase adaptability of employees and

enterprises, to increase flexibility of the labour markets.

• More flexible humane resource management via education and training of enhanced quality.

Numerical data on EU and Hungarian objectives

EU average Union

objectives Hungary

National objectives

Factual (2004)

2005 2010 Employment rate

EU25 EU25 EU25

Factual (2004)

2006 2010

Total 63,3 67 70 56,8 59 63

Women 55,7 57 60 50,7 53 57

Men 70,9 - - 63,1 64 69

55+ 41,0 - 50 31,0 33 37

Characteristics of the Hungarian labour market

• Low employment and unemployment rate:• High level of long term unemployment• Low job finding activity • Significant regional disparities both on the

area of labour demand and labour supply• Very low rate of employment of low-

skilled workers

The objectives of Hungarian employment policy

• More jobs – extension of employment• Better jobs• Access to employment for all

Competitiveness – social cohesion and employment

Competitiveness

Employment

Social cohesion

Employment and competitivenessExtension of employment• More employees• Skilled labour• Coordination of labour demand and supply

Competitiveness

• Human resources as growth factor• Flexible, competitive labour and labour organisations• Tax base grows• Demand for social transfers decreases, possible tax cut

Employment is the key factor of cohesion

Extension of employment

• To promote labour market entries

• To improve employability

• Inclusive labour market

Social cohesion

• To decrease wage gaps, wage approximation • Social integration• Equal opportunities

Hungarian employment strategy – Employment Chapter of the National

Action Plan

• Based on the previous action plan and employment policy evaluationThe selection of priorities and guidelines was influenced by macroeconomic priorities:

- Stability, extension and visibility of resources

- Maintaining and improving competitiveness

Hungarian employment strategy based on the National Action Plan for Development and

Employment • To increase employment rate,

• To increase activity rate,

• To promote restructuring and to strengthen adaptability

Priority objectives of employment strategy

To establish an integrated employment and social benefit system which is able to address the problems of inactivity and social disadvantages of active labour in a coordinated manner by promoting and stimulating labour market activity.

• To provide access to lifelong learning to all including low-skilled workers.

• To enable students to acquire skills and marketable knowledge necessary for labour market participation within the education system.

Priority objectives of employment strategy (cont.):

• To improve employability and to combat labour market discrimination in order to foster the labour market participation of disadvantaged groups

• To promote measures improving the health condition and preserving heath in order to decrease the number of inactive people.

• Advanced coordination of regional strategies and measures regarding economy, labour market and education in order to decrease the regional disparities of employment.

Funds to implement the strategy

• labour market Fund

• Structural Funds – operative programmes

• state budget

• other funds

National documents determining the use

of structural funds 2007-2013

- national strategic reference framework

operative programmes:

- Human resource management: ESZA operative program

-Human infrastructure development: ERFA operative program

What issues are decisive from the point of view of the sector?

• Adaptation to the changes:• Adult education should be accessible to

everyone• Forecasting and managing restructuring• Flexecurity on the labour market• Strengthening partnership among labour market

actors, development of the institutions and mechanisms of social dialogue

Restructuring

• Multi-actor cooperation is needed: employers, several areas of the government together (economic policy, employment , education), among local actors, social partners etc.,

• It is an issue related not only to economy and competitiveness but also to employment

• Important: forecasts regarding restructuring (national, regional, local, industrial)

• Promoting the preparation for the changes at the level of enterprises and employees: training/retraining; targeted employment services, operation of assistance systems supporting restructuring

THANK YOU FOR YOUR ATTENTION!