Labour Demand During Transition in Hungary

Transition from socialist to market economy brought drastic changes on the Hungarian labour market. Employment fell by 1.6m, i.e., by more than 25% during the past decade, while unemployment jumped from practically nil to over 14% within four years. This paper describes the changes in corporate labour demand resulting in this drop in aggregate employment, and gives an empirical analysis of the corporate labour demand during the transition period, based on a panel of medium-sized and large Hungarian firms.