Why are public works programmes ineffective? BI experts explore the reasons in new publication

29/06/2015

Public works schemes play a key role in Hungarian employment policy. BI experts contributed to several subchapters of the latest volume of The Hungarian Labour Market series that explores the practice and effectivity of public works.  

In the last twenty-five years, public works schemes have been used increasingly, as reflected by data on budget costs and the number of participants. The latest volume of The Hungarian Labour Market series (edited by researchers of the Institute of Economics of the Hungarian Academy of Science) explores the functioning and effectiveness of public works schemes in detail. BI experts contributed to the volume by writing several subchapters. Katalin Bördős describes the institutional and legislative changes regarding public works in Hungary starting from the 1990s; in another subchapter, co-authored by Irén Busch, she summarises and evaluates the available data sources on the size of public works programmes. Comparing the Slovak and Hungarian public works schemes, Ágota Scharle highlights the political risks inherent in the Hungarian regulation. Zsombor Cseres-Gergely (co-owner of BI) presents the results of his research (along with György Molnár) using administrative data from the unemployment register. Based on his analysis of the characteristics of public works participants, he shows that the likelihood of entering the public works scheme increased for young jobseekers (and more generally, those who have a shorter history in the unemployment register), which suggests that the targeting of the programme has become less efficient. Based on his analysis on the possible exits from such programmes (also conducted together with György Molnár), he concludes that participation in public works of a longer duration and higher working hours per week clearly reduces the  chance of exit to the open labour market, and increases the chance of re-entering public works.

More information on the Slovakian public works programmes can be found in our Policy Brief series.