Demographic and labour market situation in Hungary in the light of global trends

Abstract

Demographic changes significantly affect a country's economic growth prospects. In recent years, advanced economies have been characterized by aging societies, which can have many macroeconomic effects, including the reduction of labour supply. This makes it necessary to examine demographic and labour market processes in a unified framework. The purpose of this study is to analyse the Hungarian demographic and labour market processes, and to reveal their relation to global trends and country-specific factors. Demographic and labour market processes also fit into international trends in Hungary, however, unique country-specific factors can also be identified due to the path dependence of development. In addition, the increase in the fertility rate in recent years should be highlighted in Hungary. Mitigating the decline in labour supply as a result of aging and reversing its potential trend is an essential factor in the tight labour market. This tension can be resolved by adapting and extending the achievements of Industry 4.0, as well as through foreign workers. Nevertheless, the long-term maintenance and potential increase of Hungary's labour force reserve is necessary to maintain its current economic growth.