The Equilibrium Institute’s Policy Proposals on Facilitating the Return of Hungarians Working Abroad
Domestic emigration affects economic growth, the sustainability of social welfare systems, the availability of a deployable workforce, and the ability to realize the potential inherent in human resources. Compared to the perceptible significance of the problem, we know very little about the true scale of long-term outflows abroad and their detailed effects on the Hungarian economy.
From the perspective of an increasingly tight Hungarian labour market, considerable reserves lie hidden within the European Hungarian diaspora; the greatest obstacle to tapping into them, however, is the lack of fact-based, sufficiently comprehensive knowledge.
The EU’s larger destination countries gradually lifted the labour-market restrictions affecting citizens of the member states that joined in 2004 after 2010. In 1990, close to 400,000 Hungarians lived abroad on a permanent basis — a figure that had grown to 770,000 by 2023.
The share of working-age (20–64) emigrants from Hungary relative to their age cohort more than tripled between 2010 and 2020: in 2020 it stood at 4.4 percent (260,000 people), but prior to the coronavirus pandemic, in 2017, it had already reached 5.6 percent, which amounted to 339,000 working-age emigrants. Those working in European countries make up 7 percent of Hungary’s 4.7 million employed persons.
The three most attractive destinations for those leaving the country are Germany, the United Kingdom and Austria — in these three countries alone, some 281,000 Hungarians live and work.
Since 2013, Hungarians working abroad have remitted home an average of 2–3 percent of GDP annually, an amount comparable to the sum of EU funds paid out to Hungary. The most remittances arrived in 2016, reaching 3.6 percent of gross national product, but even during the coronavirus pandemic, in 2021, this figure still stood at 1.9 percent of GDP.
Based on data from a questionnaire-based survey conducted among Hungarians working abroad, the main causes of emigration are: the higher salaries available abroad, an uncertain and unpredictable future at home, a negative assessment of the domestic political situation, dissatisfaction with the mentality of fellow citizens, and financial difficulties. The main factors working against returning home are: low salaries, economic uncertainty, and general satisfaction with life abroad.
Meanwhile, the factors driving people toward returning home are the lack of social ties and homesickness, as well as — for many — the difficulties of job searching and unmet income expectations.
Roughly five-sixths of those living abroad consider a return either unlikely or possible only in the very distant future, yet some 15–17 percent plan or consider it conceivable that they will move home within the next 5–10 years.
According to the Equilibrium Institute’s forecast, by 2028 the number of Hungarians living abroad will decline from 770,000 to 750,000, while their remittances will fall from 2.2 percent of GDP to 1.4 percent. The return of 10 percent of working-age citizens who emigrated after 2004 primarily for employment purposes would yield an additional 0.02–0.12 percentage points of growth annually by 2028; the return of 25 percent would yield 0.05–0.3 percentage points; while the return of 33 percent would yield 0.06–0.45 percentage points of additional growth.
According to the Equilibrium Institute’s calculations, should the various return scenarios materialize, the nominal value of Hungary’s GDP could grow by as much as HUF 300–1,500 billion by 2028.
The Equilibrium Institute proposes that companies employing workers who live abroad and work in shortage occupations receive a one-time grant that may be used for return-relocation support and/or wage supplements, provided that those concerned undertake to work in Hungary for a specified period. In addition, the state should use tax incentives to encourage the employment of Hungarian workers who have returned from abroad at domestic SMEs.
The functioning of the state must be made faster and more cost-effective. By 2030, let us create a paperless, digital state! Let us make data transfer between state bodies automatic! Let it become prohibited for state bodies to request from citizens any documents that they could also obtain from another state body!
The Equilibrium Institute holds that returning Hungarians must be brought into employment programmes — whether through targeted programmes or by integrating returnees into existing labour-market programmes and training courses. In addition, the state should use targeted instruments (free language courses, social and labour-market retraining programmes) to help family members integrate into the Hungarian environment.
The Equilibrium Institute proposes that, for the sake of greater efficiency, the Hungarian state should involve the organizations and associations of Hungarian communities in the larger destination countries in its repatriation programmes. The Hungarian state and the largest Hungarian employers should make contact with the higher education institutions of European destination countries through the Erasmus+ programme.
The Equilibrium Institute proposes that repatriation-oriented communication, rather than taking the form of a general nation-branding campaign, should respond substantively to the experiences and needs of those working abroad, emphasizing the financial and career-building advantages of returning home.
In partnership with the state, Hungary’s major cities should actively join in organizing repatriation programmes. Major cities facing significant sectoral labour shortages in connection with some larger investment or development project should launch targeted campaigns in the larger destination countries to lure home those working in the affected sectors.