Social Investment: Education, Employment & Social Inclusion

The crisis has strongly impacted European societies. The need for social protection increased due to rising inequalities, in-work poverty, persisting unemployment and at the same time the ability of the Member States to provide inclusion policies and the needed social protection is limited originating from financial pressure. To solve this problem social reform is necessary; modernisation of social protection systems and services structured around an innovative social investment approach. This should help individuals, families and the society at large to adapt to current and future societal challenges and Member States to use their social budgets more effectively and efficiently.

Our approach

The innovative approach to social investment is relatively recent when considering the reform of the welfare state. It perceives the state as an investor rather than a spender by focusing its efforts on preparation and prevention instead of reparation. It includes investment in human capital (e.g. early childhood education and care, education and lifelong training), the efficient use of human capital (e.g. supporting women’s employment), and fostering greater social inclusion (granting labour market access to groups traditionally excluded).

Research on innovative ways of social investment presumes the following activities:

  1. identifying the problem;
  2. determining those policies which are in line with these characteristics of the new approach;
  3. evaluation of policy measures;
  4. building case studies, best practices from the identified cases, concentrating on affects and adaptability to identify innovative ways of implementation and financing of social welfare systems.

Besides, focus on gender dimension and generational justice is a horizontal requirement of this multidisciplinary research.

Leading Researchers



Our research team has already gained experience in conducting multidisciplinary research relating to many parts of social investment, such as identifying spatial inequalities, local development projects, and evaluating welfare measures.

1. Identifying spatial inequalities

The first step is to identify the problems. Spatial inequalities are at the same time causes and results of social developments. Our researchers have conducted research on many forms of spatial inequalities: inequalities in income (Major 2008), in human development index (Csite and Németh 2007) or in life expectancy (Csite and Németh 2008) at micro-regional level in Hungary.

Related publications:

Czaller, László  (2017) Increasing social returns to human capital: evidence from Hungarian regions, Regional Studies, ISSN: 0034-3404 

Czaller, László – Major, Klára (2015): Agglomeration wage premium in Hungary, HÉTFA Working Papers No. 2015/13, Budapest, ISSN 2062-378X

Csite András – Németh Nándor (2008): A születéskor várható élettartam kistérségi egyenlőtlenségei az ezredforduló Magyarországán. Kormányzás, Közpénzügyek, Szabályozás. Vol. 3, No. 1, pp. 257-289. (in Hungarian only)

Major Klára (2008): Income Disparities among Hungarian micro-regions: the Mover-Stayer model, Acta Oeconomica, Vol. 58 (2) pp. 127–156.

Csite András – Németh Nándor (2007): Regional inequalities in the quality of life: potentials of HDI estimations at the level of Hungarian micro regions. Budapest Working Papers On The Labour Market, BWP 2007/3 (in Hungarian only)

2. Case studies on local development projects as solutions

Several case studies about local economic development projects was delivered in Németh (2010), who investigated whether development projects at community level are permanently able to decrease long term unemployment in rural areas. These projects analyze characteristics from both market and state based solutions. This topic was supplemented by Megyesi (2012) through a research about institutions and networks in rural areas.

Related publications:

Zsár, Virág – Csite, András – Czaller, László (2016): Examination of the efficiency of villages [A falvak hatékonyságának vizsgálata]. Budapest. Brief English summary is available

Megyesi Boldizsár (2012): Institutions and networks in rural development: two case studies from Hungary. In: Stefan Sjöblom, Kjell Andersson, Terry Marsden, Sarah Skerratt (ed.) Sustainability and Short-term Policies: Improving Governance in Spatial Policy Interventions Surrey: Ashgate, 2012. pp. 217-244. (Ashgate Studies in Environmental Policy and Practice) (ISBN:978-1-4094-4677-4)

Németh Nándor (ed.), Csite András, Kabai Gergely, Németh Nándor (2010) Helyi Kezdeményezésű Gazdaságfejlesztési Programok vizsgálata, értékelése. [Evaluating and analyzing “Locally Initiated Economy Development Program”, using case studies (2010)]

3. Effects of welfare measures

State provided welfare benefits influence the choices of the individuals, and among other, their choice to participate in the labour market. Lovász and Szabó-Movai (2013) investigate how childcare benefits influence mothers’ labour market choices. They show that the availability of subsidized childcare (kindergarten) affects Hungarian mothers’ labour market participation significantly but is not able to explain all the changes happens around the 3rd birthday of the child. According to their conclusion other factors like the separation preferences or availability of flexible job opportunities influence the mothers’ choice, as well, as the childcare and mother leave.

Related publication:

Czaller, László  (2017) Increasing social returns to human capital: evidence from Hungarian regions, Regional Studies, ISSN: 0034-3404 

Lovász, Anna – Szabó-Morvai, Ágnes (2017): Institutional Context and the Effect of Childcare on Maternal Labor Supply – a Cutoff-Based Cross-Country AnalysisHÉTFA Working Papers No. 2016/20, Budapest, ISSN 2062-378X

Lovász, Anna – Szabó-Morvai, Ágnes (2015): Does Subsidized Childcare Matter for Maternal Labor Supply? A Credible Cutoff-Based Estimate at a Policy-Relevant Point. HÉTFA Working Paper No. 2015/9, Budapest, ISSN 2062-378X

Szabó-Morvai, Ágnes (2014): Who Benefits from Child Benefits? The Labor Supply Effects of Maternal Cash Benefit. Budapest

4. Evaluating development policies

During the program evaluations of the 2007-2013 national strategic reference framework commissioned by Hungarian Development Agency our researchers led research programs about different socially groups:

  • Roma (gipsy) integration
  • background of youth unemployment
  • local effects of territorial cohesion policy
  • dynamization of underdeveloped regions

Related publications:

Megyesi, Boldizsár (2016): Landscape after accession: the effects of agricultural and rural policies on farming – results of a case study conducted in Western-Hungary. HÉTFA Working Papers No. 2016/18, Budapest, ISSN 2062-378X

Mike, Károly – Balás, Gábor (2015): Measuring for Absorption: How the Institutionalisation of EU Cohesion Policy Influences the Use of Performance Indicators in Hungary. The NISPAcee Journal of Public Administration and Policy, Vol. VIII, No. 2, Winter 2015/2016

Balas,Gabor – Borbas, Gabriella (2013): Expert evaluation network delivering policy analysis on the performance of Cohesion policy 2007-2013 Year 3 – 2013 Task 1: Job creation as an indicator of outcomes in ERDF programmes. Hungary. Summary available.

HÉTFA (2012): Evaluation of developments serving the Roma integration

HÉTFA (2013): Exploring the socio-economic background of NSRF developments aiming at the decrease of youth unemployment

Pannon Elemző – REVITA – HÉTFA – Budapest Intézet (2013): The Role of Community Funds in the Dynamization of Underdeveloped Regions

Pannon Elemző – REVITA – HÉTFA (2013): Evaluation of the Effects of EU Funding on Territorial Cohesion