You are here

Youth Guarantee Work Trial

Policy Instrument

Youth Guarantee Work Trial

Ifjúsági Garancia
Hungary

Description

Timespan

2014-2020

Stage

Fully operational

Foundations

Policy area

This instrument is an element of the YG scheme, which has proved very popular in Hungary. It offers a full or partial subsidy to employers to cover the wages and social contributions of newly hired young jobseeker for 3 months. In effect, it covers the probation period and ensures that youth with no work experience have a chance to prove their abilities. No subgroups (such as the low skilled or Roma) were defined within the target group, and there are no provisions to provide more services to disadvantaged youth, other than what is implied by the personalisation of PES services and measures.

Policy goal

The actions target all types of NEETs below the age of 25, including inactive and unemployed young people who are not in education or training and who need practical experience before they can enter the primary job market. By providing subsidies to employers hiring young people in need of help, young people gain experience, knowledge, upgrade their skills and are more likely to be able to find a job in the primary job market.

Mismatch

Explicitly designed to address skill mismatch

The instrument addresses skills mismatch by endowing young people with practical skills that can only be acquired in a work environment. VET education tends to be of rather low-quality, therefore practical experience is especially important for employers to hire young people with vocational degree.

Aim of policy instrument

To match the skills of young adults .

Administrative level

National

Main responsible body

Ministry of National Economy

Stakeholders

PES offices - implementation of the YG instruments
Ministry of National Economy - YG programme design
VET schools - YG is presented in school class
Employers - recruiting YG target group

Main implementing partners of the YG:
Ministry for National Economy
Ministry of Human Resources
National Employment Service (including the National Employment Office, the Labour Centres of County Government Offices and the branch offices)
Hungarian Institute for Educational Research and Development (OFI)
Educational Office (OH)
National Youth Council (NIT)
Hungarian Chamber of Commerce and Industry (MKIK)
Standing Committee of Representatives of the Private Sector and the Government (VKF)
Young Entrepreneurs Association Hungary (FIVOSZ)
Hungarian Foundation for Enterprise
National Office of Family and Social Policy (NCSSZI)
Klebelsberg Centre for Institution Maintenance (KLIK)
National Roma Self-government (ORÖ)
National Council of Vocational and Adult Education (NSZFT)

Funding

Total public financial allocated: operations approved for funding €127 million.

Intended beneficiaries

Young people not in education or employment aged 15 to 25, especially those registered as unemployed for 6 months, as well as young people in need of support to be able to enter the world of work/education. Expected benefits include shorter duration of unemployment, gaining experience, and higher wages.

Processes

Use of labour market intelligence

By applying wage subsidies in the programme, YG implicitly uses LMSI, as employers who see a potential in training young people and equipping them with skills that are relevant in their industry (and which therefore are likely to have a future too), are going to use the YG tool. When it comes to training measures, YG only supports training programmes if they are not directly related to low-demand professions.
The Youth Guarantee programme is implemented in two stages: in the first stage, only young people who have been registered with the Public Employment Services for at least 6 months can participate in the programme; eligibility is to be gradually extended to all young jobseekers below 25 by 2018. The provided services remain the same in the two stages; the only difference is the size of the target group.
An individual action plan for labour market integration is prepared for every participant, and each participant receives assistance from a trained youth mentor. Participants may apply for jobs on their own as well. In this case, they are advised to inform potential employers about the wage subsidies and to contact the local PES office. Those who are still in the age range of compulsory education and those who may return to education are guided to educational and training programmes, while those who might be integrated into the labour market are provided with differentiated support according to the level of their qualifications.

Financial schemes

YG covers 100% of the wage costs for 90 days (for gaining work experience)
YG covers 100% of the wage costs for 6 months for youth with higher than primary education, and it also covers 100% of the wage costs of a maximum of 150% of the minimum wage for 3 additional months.
YG covers 100% of the wage costs for 10 months for youth with low-educational attainment and it also covers 100% of the wage costs of a maximum of 150% of the minimum wage for 3 additional months.

Frequency of updates

On an annual basis.

Development

There is no information about major adjustments in the programme.

Barriers

According to the European Commission (2017):
1) Moving from partial implementation to full roll-out of YG scheme
2) Improve quality of offers
3) Increase outreach efforts to young NEETS (especially Roma)
4) Improve the YG monitoring system
5) Improve communication amongst implementing authorities

Success factors

1) Individualised services besides the wage subsidy.
2) Long-term wage subsidy, such that participants can acquire a substantial amount of knowledge.
3) Flexible wage subsidy frameworks.

Monitoring

1) The number of participants of the different target groups
2) The number in education/employment/training/unemployment following the intervention
3) The NEET rate
4) The employment rate of young people aged 15-24 (18.6%); youth unemployment rate 15-24 (28.1%)
5) Youth education attainment level 20-24

Innovativeness

Slightly innovative

1) Wide cooperation among different actors.
2) Targeting of the most disadvantaged.
3) Comprehensive support to young people by coupling labour market service and mentoring with dedicated wage subsidies and training.
4) Counsellor/coordinator network asked to strengthen the already existing local co-operation system between a variety of stakeholders.

Sustainability

Evidence of effectiveness

Youth unemployment and NEET rates have decreased reaching pre-crisis level in Hungary, relative to the adult population.
The YG scheme in Hungary was launched on 1 January 2015 and the results of monitoring show that, on average, across the year only 2.6% of all NEETS aged under 25 were covered. Of the small group leaving the scheme in 2015, as many as 94.2% took up an offer within 4 months of registration, though less than a third of these (30.4% of all leavers) were known to be in employment, education or training 6 months later. According to an assessment report, only 2.4% of the intended beneficiaries (NEETs) have been reached in 2014-15. There have been no unexpected benefits or costs.

Engagement of stakeholders

High-level ownership from different ministries, youth councils, associations, NGOs etc ensures that all stakeholders perceive the measure as something important. There is no official (and public) document describing the coordination among the different stakeholders, but there is a document for internal use describing the implementation of the YG, which also touches upon the coordination tasks. The document describes that youth counsellors working for the PES offices are responsible for i) reaching out to the target population and supporting them and ii) coordinating the tasks within the PES and with the local educational and social authorities, youth organisations and the employers in their work.

Transferability

Easily transferable

Wage subsidies are easily transferable to different contexts. In a context with a high degree of informality, wage subsidies can even serve as a tool to improve formality (given that subsidies are only payable to registered employees/employers), which is an additional positive impact besides supporting young unemployed people into employment.

Sustainability

Yes, as YG is part of a large-scale European youth strategy and because the programme produces promising results.