The labour supply of older workers in Hungary

1
The labour supply of older workers in Hungary

• Scharle Ágota
• Ministry of Finance, Hungary
• Department of Economic Policy

2
Activity rates drop after age 45
3
This is very low compared to EU, even CEE levels
4
An experiment increase activity rates for men
aged 45-54 and 55-64
5
And it is threatening the balance of the Pension
Fund
6
Activity would need to increase by 12 points to
balance PF
7
Reasons behind low activity rates in old age

• Low qualifications
• High unemployment
• Pension receipt
• Attitudes

8
Disability pension receipt has hardly declined
since transition schock
9
Possible solutions

• Increase statutory retirement age (62-gt65)
• Tighten eligibility for disability pension
• Premium for later retirement
• Integrate taxes and social support
• Subsidies for low wage employment and old age
  workers
• Minimum wage legislation