This report documents the emergence of agroup of long-term poor in Hungary. While growth willcontinue to be necessary to create well-paying jobs thatwould enable people to escape poverty, the long term poorare not likely to benefit from growth since they aredetached from the labor market, socially excluded, and inmany cases, facing discrimination which keeps them fromreintegrating into the labor market. The long-term poor inHungary are comprised of several distinct social groups: thehomeless, rural population particularly those living inmicro-communities, unemployed or withdrawn from the labormarket, households with more than three children, singleparent families, single elderly females, and the Roma. Athird of the long-term poor are of Roma ethnicity, eventhough this group is only approximately 5 percent of theHungarian population. The analysis of the labor marketconfirms the connection between long-term unemployment andlong-term poverty. One of the messages of this report isthat the Roma need good-paying jobs first and foremost. ManyRoma villages are characterized by a cycle of dependency onstate transfers. Reinsertion programs are needed to breakthis cycle. In the medium term, emphasis on providinghigh-quality general education to the Roma is needed. Thesechallenges for Hungary are complicated by decentralization,which may lead to unequal treatment of the poor, with lessfinancing available where social programs are most needed.
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