This paper was written at the order of the World Bank Budapest Office at the Social Research Informatics Center (TÁRKI) in 1994. The author wishes to thank Rudolf Andorka, Péter Szívós, Kálmán Gábor, Eric B. Weaver and István G. Tóth for all of their help. Of course, they bear no responsibility for mistakes and shortcomings.

Zoltán Fábián: Review of the main research on poverty

The following research review mainly focuses on the literature from the eighties and the recent past. This choice is not entirely arbitrary inasmuch as this was a period of renaissance in research on poverty. It might seem contradictory that the term of "poverty" remained an irritating expression for the officials of the ruling communist party until the second half of the last decade. Although the word was replaced by such euphemisms as "cumulative adverse situation", or "low income population", some party officials began to recognise the social political significance of the problem at the beginning of the 1980s. It is not the purpose of this paper to explore the direct causes of this change in the policy, since this would entail much more complex historical research. Still, it is possible to point to the relationships between the general political-economic conditions of Hungary and the vicissitudes of social science research on poverty.

Completing this task, fortunately, is easier today than it would have been before 1989, since the collapse of the state socialist system and the democratic transition have created the opportunity for public debate on social policy issues. Obviously, there is an increased demand in the scientific community to take account results from past research on the topic that had not been available into account. We already have papers (e.g., Andorka, 1994; Salaminné, 1991) and memoirs (e.g., Benda, 1991; Kemény, 1990) on the antecedent research, that were used as sources for this historical section.

The official soviet Marxist ideology of the communist political regime after 1947/48, proclaimed the program of total elimination of poverty, and in the long term the gradual diminishing of all social inequalities. Poverty was mentioned as the result of the previous social and political system, as something that would vanish in the near future. Therefore the chance that social political traditions existing in Hungary before the World War II would survive, shrank to almost nothing. As in most Soviet block countries, sociology, psychology and other social sciences were prohibited and banished from academic institutions. The topic of the poverty in the social sciences was banned, since the phenomenon was seen as discrediting the socialist system.

The uprising in 1956 was suppressed bloodily by Russian intervention. The lesson of the revolution showed the ruling communists that the totalitarian means of governing per se were not sufficient to maintain their political power over Hungary. As a long term consequence of the Hungarian revolution, they realised the necessity of seeking some compromise between civil society and political power. The point of the changed attitude was expressed by János Kádár's: "whoever is not against us, is for us". Although the totalitarian nature of the regime manifested itself in various ways in the public sphere, the autonomy of private dimension of the everyday life was restored to a larger degree. Primarily this meant, that people were not forced to constantly demonstrate their political loyalty to the party. This is the period of so-called Kádárian consolidation began with the political amnesty of 1963 when most of the participants of the insurrection were released from prison. As intervention in private life was reduced, the people had the chance to arise their living standard throughout consumption. Such consumer goods as televisions, cars and refrigerators became available to the larger public during the sixties. (This is why the hard line left-winger critics apostrophised the system as "fridge socialism".) The gradual improvement of the population's living conditions was made possible by a new economic view, which discontinued the previous practice of following the Soviet economy by concentrating exclusively on heavy industries, and tolerated small-scale private enterprises, especially in the agricultural sector. The modification of previous political and economic practices created a demand for some kind of reliable social science research. Therefore it is not by chance that the first post-war sociological investigations can be dated back to 1963. This is the year of the foundation of Sociological Research Institute of the Hungarian Academy of Sciences and the first empirical study on social stratification. This stratification research represented the first attempt of sociology to escape from the dogmatic Marxist view of social structure, – and was carried out at the Central Statistical Office (CSO) by Z. Ferge, I. Kemény, and others (Fergéné et al., 1966). R. Andorka (1994), a former research fellow of the CSO described the work atmosphere in the CSO: "In the 1950s the office had been as closely censored as any other institution, but its president, G. Péter, was among the first to recognise that the centrally planned economy could not operate efficiently; he had proposed market oriented reforms as early as 1955-56. Under his enlightened leadership and protected by his great prestige with party leadership (he was among the Communists who had suffered the longest imprisonment in the pre-1945 period), research into social statistics and demography experienced a renaissance in the 1960s. The Statistical Office conducted the first signally important sociological surveys of the post-war era (...). After Péter's arrest and subsequent death in prison in 1969 – for reasons and in circumstances still obscure – his successor, I. Huszár, was able to carry on under the same intellectual and political orientation." (pp. 372-73)

Since 1963, the household and income survey has been continued and repeated regularly at five-year intervals by the CSO. After the second wave of the household survey was completed in 1968, some of the households in lowest income decile were re-interviewed in October of 1969. This research, that specifically focused on poverty, (thus the first post-war research on this field) developed, when the leader of the study, István Kemény gave a lecture on poverty at the Hungarian Academy of Sciences. Recollecting the situation in 1992, he wrote: "The speech was delivered at the festal session of the Academy. At that time I was a research fellow at the Sociological Institute of the Academy. I had started the poverty study in 1969, with the bashful title of >>The survey of living conditions of the low income population<<. The paper summarising the results of the study was prepared in March of the 1972. Thus, the speech was not based on the poverty study, but on two other studies completed in 1969. I used the prohibited term of that time, – poverty - and indicated that low income was not sufficient as a criterion to define poverty. The >>scandal<< was worsened by the fact, that – as a result of the data I used – workers' families appeared in the representation of poverty types. I also directed attention to the uneducated poor children, who two or three decades later would represent >>the biggest problem for themselves and for the nation as a whole<<. Naturally, at the party center they did not think of that, but of the retortion." (Kemény, 1992A: p. 79.) As a consequence of this speech, in which Kemény summarised the findings from studies on workers' living conditions, he was fired from the Sociological Institute . He had already pointed out some anomalies in the operating welfare programmes in his address. Workers in the lowest position in the work division (semi-skilled and unskilled workers) were less likely to take advantages of such institutions as soup-kitchen, medical consultation, or free holidays than supervisors and skilled workers. His figures on education of workers' children strikingly demonstrated the reproduction mechanism, by which poverty reproduces itself over generations. In 1969, every fifth child (20 %) of the children of semiskilled workers living in Pest county, did not complete primary school. This value was 8 percent for the skilled workers' and 15 percent for unskilled workers' children.

Kemény's life in Hungary became even more difficult, after he lost his part-time jobs, because of the informal "seminars" he had organised. These meetings provided a unique opportunity for interested researchers and Kemény's working fellows to exchange their ideas freely under his intellectual guidance. His theoretical insight into various fields of sociology made him extremely influential among Hungarian sociologists. For example, he was among the first who popularised Weberian ideas in Hungary. With that Weberian theoretical background, it is understandable why he stressed the importance of studying the "totality of the poor's way of life" (életforma), instead of focusing solely on income. Kemény's personality was objectionable to the authorities, not just because of his record of participation in the 1956 revolution, but because his sayings about poverty were considered as discrediting for socialism. Economic reforms in Hungary, after the intervention of Warsaw Pact troops into Czechoslovakia, were criticised from many directions. The question of poverty was a possible argument for opponents of economic reforms. Kemény, who talked about "one million beggars" in Hungary, was embarrassing even to reformers in the party leadership.

Andorka (op.cit) connected the minimum subsistence calculations at the end of the sixties, to the debate over Kemény's research work: "R. Nyers, the party secretary responsible for the economy and for economic reforms, asked the Statistical Office to prepare an exact figure for the minimum subsistence level and to conduct a survey on poverty - but to keep the results absolutely secret. The resulting calculations put the minimum-subsistence level in 1968 at 600 forints per capita per month and also set forth a >>socially acceptable minimum<< of 800 forints, which allowed for a few less necessary expenses. On these bases Kemény turned out to be right: about 1 million persons, 10 percent of the population in 1967, lived on an income of less than 600 forints per capita per month. Another 1.5 million lived on a little more than that lowest minimum, but less than the socially acceptable minimum." Compared these figures to those of calculated on the 1962 Income Survey data, a significant decrease in the number of the poor can be find. (cf.: Figure 1. on page 5.)

After Kemény (1972) had prepared his final report on the findings of poverty research, its publication was prohibited. Nonetheless a few copies circulated among sociologists (Kemény, 1991: p. 183.). The research design made the examination of persistence possible. As in his lecture at the Academy, he stressed the importance of education in the continuance of low-income state, especially the lack of vocational training (cf. table 1.), and the reproduction of uneducated labour force.

Table 1.: Proportion of Earners With Vocational Degree to Active Earners (%)

Capital

Towns

Villages

Total
Low-income in 1967

56.3

49.4

29.0

35.5

Came out from low-income, 1969

75.0

61.7

50.1

55.7

Persistently low-income, 1967-1969

25.0

39.6

18.4

23.5

Income under 400 forints, 1969

-

21.1

11.4

15.5

Average income level (control sample)

69.3

71.4

58.6

62.9

Source: Kemény, 1972: p. 202.

Figure 1.

Alleviation of Poverty in the 1960s: Proportion of Persons below Socially Acceptable Minimum and Minimum Subsistence Levels, 1962-1967

Source: Andorka (1989: p. 33).

Kemény was among the first, who recognized, that ethnicity is one of the main factors in understanding the nature of extreme poverty in Hungary. He found that the proportion of Gypsy families among active-earner, low-income households rose from 17 percent to 24 percent between 1967 and 1969, while Gypsies constituted only 2-4 percent of the total Hungarian population. (Kemény, 1972) He played an avantgarde role in the scientific research into the sociological characteristics of the Gypsy population when he conducted a survey on a representative sample of them in 1971.

Because of some widespread stereotypes, it was necessary to emphasize the fact, that poverty concerned wider segment of the society than just Gypsies or pensioners. In 1967 about 1 million persons belonged to the low-income category, but only 30 percent of them lived in households consisting of pensioners. The total number of Gypsies in Hungary was estimated at about 320 thousand at the time of Kemény's survey. 56 percent of them, about 180 thousand persons lived on less than the 600 forints per capita per month income. (Kemény 1992B: p. 169.) This meant that "only" about 18 percent of the low-income population was Gypsy at the end of sixties.

Kemény's immigration in 1977 was one of the indicators that political conditions did not encourage sociological studies in this field. The signs of ideological freezing appeared in various areas of intellectual life. In the Central Statistical Office, a conservative apparatchik, G. Bálint followed in the presidency the reformer and professional leaders (G. Péter and I. Huszár). (Benda, 1991) Although several preliminary studies were developed in the second half of the seventies in the CSO, the results have never been published. The manuscripts were handled as top secret documents, and only selected highest-ranking party officials could get to know them. According to Gyula Benda, who was the head of the Social Statistics department from 1975 to 1980, the National Planning Committee initiated research on the "population in multiple adverse situation" (többszörösen hátrányos helyzetűek) in 1979. The Planning Committee was lead by I. Huszár at that time, and Benda prepared a paper on "the way of life of social groups in multiple adverse situation". He reanalysed the 1968 and 1972 Income Surveys and attempted to demonstrate that, despite stereotypes, low-income families with many children were not identical with Gypsies, and beside the "subcultural" type of poverty, there were families of "normal" way of life among the low-income population. He also stressed the structural nature of poverty. He was against the officially approved view that poverty is a relic of the pre-war social structure. (Benda, op.cit.: pp. 10-11)

The concept of "multiple adverse situation" later became an ideologically acceptable euphemism for poverty, but originally it was defined as a "persistent state" resulting a "specific way of life", which "is determined by multiple factors and deviates negatively from the socially acceptable situation of families, and households." (Benda, op.cit.: p. 7) This definition showed that Kemény's approach to poverty as way of life was influential among the researchers, despite his official anathematization. Presumably, the research initiated by Planning Committee was linked closely to I. Huszár, who continued it later at the Institute for Social Science after 1981.

Turning back to the CSO research in the 1970s, we should mention another unpublished paper by G. Benda and László Vita on the low income population. Since the manuscript is not available at the moment, we must consult Benda (op.cit.) again: "On the population and household incomes, a survey was completed in 1973 surveying the incomes of the previous year (1972). There was only an opportunity for secondary analyses of that data. Basing on previous experiences, László Vita examined the lowest income quintile as low income population. He calculated per-consumption-unit incomes, and always separated the lowest 5 percent, – stressing, that they probably had every day bread-and-butter worries – the second lowest 5 percent, and the lowest two deciles. He compared their characteristics to the average, or the middle deciles. The lowest 5 percent had not more than 545 forints per-consumption-unit income (the population mean was 1,579 forints). Among the first decile, this value was 828 forints. The whole of the lowest quintile was composed of those who lived on less than 1,100 forints income. This population of 2 million people was, by and large, identifiable with the population below social minimum, on the basis of the corrected 1968 calculation. (...) There was no active earner among 23.4 % of the low-income households, and the occupational composition of the low-income households deviated from the total population: they were characteristically composed of unskilled workers and agricultural workers. Every seventh of the active earner, every fifth of semi-skilled and agricultural, every forth of the unskilled worker household belonged to low-income category. Two thirds of the households without active earners (mainly pensioners) were in this class. As a second step of the analysis, household types were formed on the basis of factors affecting low-income situation. Among these factors, pension as sole source of income, irregular employment, low-paying (less than 1,800 forints) job, and many (4 or more) children were listed. Low-income household types formed on the basis of these factors, included 83 percent of the lowest 5 % income share households." (pp. 9-10) In the end, three basic types were distinguished: (1.) the old (households consisted of inactive earners); (2.) families with many children; and (3.) other households, where low income was the result of the low earners to non-earners ratio.

It should be noted that it would be misleading to convert the above presented income data into, say, US. dollars to judge the purchasing power of these sums. The 1,100 forints per c.u. income of the lowest quintile would be about 55 US dollars, according to the official conversion rate in 1972, but the post-war system of centrally regulated consumer prices makes such comparisons pointless. In the appendix, one can find a list of prices of some selected goods and services, to make the 1972 incomes more interpretable. (cf. Table A1.)

As we have seen, after the promising start of the research on poverty in the 1960s, the next decade was the time of survival the "counterattack", as Andorka (1994) denoted the conservative turn in internal policies. Although household and income surveys continued and there was opportunity for data analyses, (primarily for secondary analyses) no survey on poverty had been conducted and the subsistence minimum calculations had been suspended. In this respect, the only exception is G. Fekete, who calculated minimum income levels for pensioners and for young adults. (Fekete, 1980; 1981) His work found respond only in narrow professional circles, since the results have never been published.

The breakthrough in the research into poverty at the turn of the seventies was inspired – directly and indirectly – by István Kemény. After his immigration to France in 1977, his former students founded an organisation to help the poor. Such an activity in that time had an openly oppositional political meaning. The Foundation to Support the Poor (Szegényeket Támogató Alap abbreviated as SZETA) was established by, among others Ottilia Solt and Gábor Havas, who attended the seminars of Kemény (Lévai, 1989). SZETA collected and distributed donations for the poor and that activity was disapproved by the authorities. Meanwhile, Kemény had the opportunity to speak regularly on Radio Free Europe. His lectures on Hungarian poverty had broken the silence surrounding the question of poverty. Some party leaders recognised the political danger of letting this topic stay in the hands of external and internal political opposition. In December of 1979, the problem of social groups in multiple adverse situation was discussed at the Economic Team of the Central Committee. The party decision about the 6.th five-year economic plan stated that "social policy should focus on the improvement of life conditions of families with many children, low income pensioners, and those who are in an adverse situation." (Huszár, 1985: p. 15.)

On April 23-24 of 1981 a conference on "Research on the Multiple Adverse Situation" was organised by the Hungarian Sociological Society. The event got great publicity, and was reported in the daily press (Andorka, op.cit.). The topic was obviously approved by the MSZMP authorities, thus the conference itself signified a turn in the official attitude toward research on poverty.

The first lecturer, István Huszár (op. cit.), the former president of the CSO, introduced the concept of "adverse situation". It was the first time when figures from 1968 CSO subsistence minimum calculations were mentioned publicly. In that time, Huszár was the director of the Institute for Social Sciences run by the MSZMP, and since 1970 had been a member in the party's Central Committee. His lecture and the conference itself represented official recognition of the topic of poverty and social policy issues in scientific research.

Many speakers at the conference expressed a similar view on trends of inequalities similar to Zsuzsa Ferge's (1979: p. 305): "The most pressing needs in Hungary have by and large been covered by now. Hunger, mass squalor, precarious living conditions, general scarcity are problem of the past, and have hopefully been wiped out forever. The far from negligible hardships which still exist – inadequate living conditions and so forth – are gradually being eased, and already they no longer affect the majority. On the other hand, a growing section of the population is becoming well-off, even prosperous. The level of production is increasing, many goods are appearing which serve much more than just the bare necessities." Thus, the participants had to answer another question: Why is poverty of interest? Huszár argued that Hungarian society had experienced a transition from traditional poverty to a new type of inequality: relative poverty or deprivation, that he denoted as a "multiple adverse situation".

To answer the question of the relevance of poverty research, it is more important to point out that the market-oriented economic reforms had slowed down during the seventies and an economic crisis had evolved. Hence, the improvement of living standard did not continued further. The unfolding economic hardships put the legitimacy of the Kadarian political system into question, a system which had been based to a large extent on the gradual improvement of life conditions for the majority. The acceptance of small-scale non-bureaucratically co-ordinated businesses in agriculture and other economic sectors served as an ultimate mean for maintaining legitimation. Market oriented reforms came into the foreground again, after a temporary pause. In the early eighties the majority of the population spent a significant amount of time working in the so-called "second economy". However, this self-exploitation had reached its upper limits, and the necessity of radical economic and political changes became evident, at least for some of those intellectuals who had participated in the public debate over reforms, including political opposition and some of the reformers in the ruling party. This situation created good conditions for social science research on various fields. Two projects completed at this time are especially important.

In the first half of the 1980s the Institution for Social Sciences, a research organisation run by the Central Committee of the MSZMP, gave place to a large-scale empirical study on social stratification and inequalities. The so called Stratification-model research was based on survey methodology. It included a probability sample of Hungarian population, and several additional samples of social groups that were underrepresented in the probability sample (e.g., Gypsies living in segregated settlements, urban deviant youngsters, and elite groups). The methodology and theoretical stand of project led by T. Kolosi represented distinct, unusual approach in social sciences in Hungary. Its peculiarities included the (1) employment of statistical methods characteristic of American sociology, and with the help of these methods, the (2) multidimensional view of social inequalities. Its third feature was its theoretical insight that had taken account the structural significance of the second economy. Kolosi conceived the structural relations as they were determined by two independent factors: by the first (state) and the second (private) economies. From the graphical representation of the model, he called it the "L model". (The rectangle of the letter L represented the independence of the two structural dimensions: they are the axes of structural space.)

Ágnes Bokor, a member of the stratification research team, employed a similar, multidimensional approach for studying the problem of modern poverty. As she herself admitted, Bokor's intellectual orientation toward the topic was influenced by Kolosi and Ferge (Bokor, 1985: p.5). Z. Ferge influenced her by stressing the relative nature of the modern poverty phenomenon, which was depicted by the concept of objective relative deprivation.

Ferge proposed this term for contemporary poverty in 1981 at the conference on the multiple adverse situation, who had adapted it from Townsend's (1979) book of Poverty in the United Kingdom. [The concept of relative deprivation has a longer history: it was introduced into sociology and social psychology by the authors of the American Soldier (Stouffer et al., 1949).]

Kolosi influenced her with the idea of the multidimensional nature of inequality and his empirical approach to social structure. Bokor's theoretical background - as any other investigators' – was affected from many directions, yet she was an independent and inventive social scientist in dealing with the problem of poverty. For example, stressed that the Hungarian society had showed a tripartite stratification structure consisted of the groups of (1) privileged, (2) middle stratum, and (3) the deprived. This view differs from that of Kolosi (1984) who differentiated between 12 status groups. However, these differences are not dramatic, since both of them recognised and emphasised the fact, that Hungarian society in the early 1980s could be characterised as showing high level of status inconsistency. In other words, the majority had different positions in the dimensions of inequalities. An average position in the stratification did not mean an average position in each status dimension, but it typically meant an inconsistent status constellation. The consistency increased toward the highest and lowest segments of the status hierarchy. The middle strata had a smaller distance to the bottom than to the top, because they could enhance their status through its inconsistency.

Bokor (1985) summarised her results in a book published in the Stratification-model Working Paper series (No. 6.), in which she tried to answer four main questions:"(1) Are there poor people today in Hungary? (2) Who are the poor? (3) In what sense can they be called poor? (4) Why are they poor?" (Bokor, 1985: p. 364.)

Bokor's answer to the first question was definitely yes, since the poverty exists in Hungary in the form of deprivation. The number of deprived was estimated about 1.5 million persons at the beginning of the eighties.

Table 2.

The Size of the Multiple Deprived Population in Hungary, 1981

by Bokor and Kolosi*

Estimations on the basis of probability sample (No of persons)
Adults

847,000

Children

377,000

Estimation from the supplementary studies of underrepresented groups**

187,000

Total:

1,411,000

* Source: Bokor and Kolosi, 1985A: p. 86.

** This category includes: Gypsies living in segregated settlements, manual workers living in workers' hostels, and deviant urban youngsters.

The population of those who is endangered by deprivation is about as large that of those actually deprived. Summing up the two groups would result in a figure of about 30 per cent of the total Hungarian population. This group does not just include the poor in the relative sense, but the traditional poor (e.g., gypsies living in segregated settlements), who are in the worst position in every respect. However, the key concept of objective relative deprivation is related to the transformed nature of modern poverty: "Deprivation is the form of poverty that appears and becomes dominant in industrial societies. In these societies, social and economic development reaches the level where satisfaction of the elementary requirements becomes possible for the overwhelming majority of those who are from every aspects on the bottom of the hierarchic social structure." (Bokor, 1986: p. 186) Deprivation is a multidimensional phenomenon; it can not be equated with low income since there are other relevant social inequalities that sometimes might play more important roles in the operation of a social system. Deprivation is objective in nature, since it can be captured through objective characteristics rather than through subjective indicators such as group consciousness or identity. Finally, deprivation is relative, inasmuch as deprived situations are relative to distributions of socially desired assets.

Several methodological experiments were carried out to measure deprivation along six dimensions of social advantages and disadvantages (work, interest, housing, material assets, life-style, and health). Finally, Bokor (1984) constructed a "synthetic deprivation index", which preserved the information content of six other deprivation indices. The basic deprivation indices were operationalized employing differing statistical procedures, and they indicated differing sizes of the deprived population ranging from 6 per cent to 16 per cent of the whole population. The definition of deprivation categories by the synthetic index is shown in the following table.

Table 3.

Categorisation of Persons by the synthetic deprivation index*

How many index indicates deprivation?

Distribution

%

Category

Categorised Distribution

%

0

68.8

Non-deprived

74.7

1

5.9

Non-deprived**
 

2

9.9

Endangered

14.3

3

4.4

Endangered
 

4

3.0

Deprived
 

5

2.3

Deprived

11.1

6

5.8

Deprived
 

* Source: Bokor and Kolosi, 1985B: p. 105.

** The grey line indicates that the 6 per cent defined as deprived by only one index, was sometimes defined as non-deprived, and at other times as endangered. When this category of non-deprived is added to endangered category, it results 20.1 per cent proportion for that group (See e.g., Bokor, 1984.)

According to Bokor, the causes of the deprivation are structural in nature, rather than cultural or individual. The structural factors are related to post-war modernisation waves or periods, by which the dominantly agricultural Hungary became an urbanised industrial society. This hypothesis was confirmed by the analysis of the social composition of the deprived population, which was found to be similar to the social structure existing three decades before the survey.

In examining the socio-demographic characteristics of deprived, Bokor and Kolosi (1985A) distinguished between two main groups. The first (about 75 per cent of the deprived) are mainly pensioners or dependants, are usually elderly, and live in small communities, or detached farms. They are those who were left out from the positive effects of the past social changes during the post-war period. Their profile is defined by their older age and economic inactivity. The second group (about 25 percent) consisted of those with poor educational background, low interest pursuing ability and therefore they have poorer chances in the labour market.

In 1986, five years after the stratification-model survey, another study was completed. Bokor (1988) reported a slight increase of the number of the deprived, from 15.9 to 16.5 per cent of the adult population. At the same time, she estimated the size of absolute poverty much less than 100,000 people. The risk of deprivation rose among active and inactive agricultural labourers, and inactive unskilled workers between 1981 and 1986. A new development was the appearance of deprivation in the categories of active lower non-manuals and inactive intellectuals.

The results of Bokor and Kolosi's multidimensional analyses show a larger proportions of the deprived than those analyses which defines poverty in terms of income inequalities. It seems to be a general rule, that the larger number of social disadvantages are taken into account, the larger extension of deprivation or poverty is resulted. (Andorka, 1989: p. 37)

At the beginning of the eighties another significant study was initiated at the Sociological Institute of Hungarian Academy of Sciences. At the order of the government, the project tried to work out a long-term concept for social policy in Hungary. Several studies were completed by the team led by Zsuzsa Ferge; for example, on the history of Hungarian social policy programmes and institutions (Ferge, 1986), the operation of housing programmes (Győri, 1987), companies' welfare grants (Krémer, 1987), and other areas of functioning social and welfare services.

Zsuzsa Ferge, the project leader was among the first to study the problem of poverty and inequalities in post-war Hungary. (Ferge, 1969) She started to work as a social statistician at the CSO and supported Kemény's work. Her interest turned from the socio-statistical description of inequalities toward the structural operation of the social system reproducing inequality. The passionate search for the ways of reducing inequalities is one of the principal feature of her works on various fields of sociology (education, social theory, social inequalities). Societal policy, – which is meant "deliberate social actions" (Ferge, 1979: p.19.) – is a keyword in understanding of her saying about alleviation of poverty and other forms of inequalities. According to her, isolated social policies should form a system, which is effective in controlling the process of social reproduction. (Ferge, 1980: p. 290) Such a consistent system is exactly what she calls "societal policy", that is not limited to the area of distributional sphere of reproduction (i.e., incomes), but by the means of socialist centralized redistribution it can influence the entire process with its institutions (e.g., educational system, labour market, etc.). This approach to societal policy and social inequalities is owing much to Karl Polányi's critic of capitalism. She reckoned that socialist countries had been more equal than developed capitalist societies in terms of most conventional income-based indicators, although the larger degree of equality had been based on a lower level of economic development. At the same time, she recognized the fact, that some of the redistribution mechanism (mostly social benefits in kind) were disfunctional inasmuch as they did not lessen effectively the existing inequalities. (Ferge, 1980: pp. 308-309) Ferge was the one, who proposed the concept of objective relative deprivation as an adequate term for the modern poverty phenomenon. Later, following E. Hobsbawn, she introduced another analytical distinction between pauperism and relative poverty, by which she made an estimation of the size of poverty in Hungary since 1867. (Ferge, 1986B; Cf. Figure 2.) It is the only attempt to compare statistically the poverty of 1950s to other periods of Hungarian history. She strikingly demonstrated that this decade, from this point of view, is only comparable to the years of depression of 1930s. The transformation of poverty from pauperism to relative social poverty took place in this period around the 1960s.

 

 

Figure 2.

Proportion of the Poor Population in Hungary, 1870-1980:

An Estimation by Zs. Ferge (1986B).

* Source: Ferge, 1986: p. 64, Table 6. (cf. Table B19 on p. 60 in this paper)

Following a party decision in March of 1983, minimum subsistence level calculations in the CSO were restarted in 1984 with a different methodology than the 1968 calculation. (The later was calculated necessary household expenditures on item-by-item basis.) (KSH, 1989A) First, a review of the "Experiences of foreign research on poverty and Hungarian subsistence level calculations" was prepared. (KSH, 1983) The calculation of Hungarian subsistence minimum is rather similar to that of US. poverty line, inasmuch both are indexed to prices, and both are based on the determination of minimum food expenditures. The Hungarian subsistence minimum level includes housing expenditures, but not the cost of acquisition, and other expenditures too, derived from the household budget survey (employing regression analyses). Subsistence minimum was defined as "the income which render possible merely to satisfy very modest necessities conventionally considered to be essential to ensure continuous living." (KSH, 1989B definition quoted in: Förster and Tóth, 1994.) Calculations were first published in 1988 retrospectively. (KSH 1988; cf. Table A2.1.) At the same time, a socially acceptable minimum, or in other words a social minimum level were calculated, which was defined as "the income within which the fulfilment of basic necessities allows such a consumption of goods and services that have become a mass social demand albeit of a modest but socially acceptable level and quality." (KSH, 1989B definition quoted in: Förster and Tóth, 1994; cf. Tables A2.2. and A3.) To adapt the methodology of calculations to the changed social demands CSO made some modification in April of 1991. The basic principles remained unchanged but the content of the food basket was modified, on the basis of recommendation of nutrition science. The results of renewed minimum subsistence level calculations are published more frequently and they cover virtually all households, not just the main types as it was the case before. (KSH, 1991; cf. Tables A4 and A5.)

Andorka (1989) – based on data from subsistence minimum levels and from CSO Income Surveys - summarised the recent trends in poverty in Hungary as follows:

· The dominantly rural poverty of the 1960s shifted toward an urban phenomenon. In 1962, 74 per cent of the poor population lived on below 400 Fts income were villager. This proportion, for the corresponding category (less than 2,300 Fts) in 1987 was only 53 percentage, while the proportion of persons lived in the capital increased from 6 to 11 percentage in this low-income class.

· A similar trend was observable in the social strata composition of poverty between 1962 and 1987: The proportion of persons living in agricultural labourer households dropped from 35 to 11 percentage, and the percentage of semi-skilled and unskilled non-agricultural workers greatened from 35 to 38. As a consequence of these two factors, poverty became more visible by the second half of the 1980s.

· Significant changes occurred in the age structure of the poor since the early seventies. Still, in the public opinion and media hold the view that poverty typically concerned old-age people. This image probably had been true in the in the 1960s, but was not applicable for the poverty of the 1980s, when more children lived on an income less than minimum subsistence level than pensioner-age (over 60 years) people. Simultaneously appeared the "working, but poor" problem; the proportion of the young adults greatened among the persons in the lowest income decile. (cf. Table A6 and Figure A1.)

· There are some evidence that poverty increased during the eighties, however, income inequalities did not exceed the level of 1962, at least till 1987. (Andorka, 1989; Atkinson and Micklewright, 1992; cf. Figure 3.)

 

Figure 3.

Trends in Income Inequality, 1962-1987: CSO Income Surveys

Sources: For Bottom / Top Decile Ratios: Andorka (1989: p. 36); Gini coefficients are from Atkinson and Micklewright (1992: p.127 and Table HI2) Both indicators are computed on per capita household incomes.

Note: Tóth et al. (1994: Table B1.2) reported a Gini coefficients of 0.2901 for adjusted (e=0.73) household incomes computed on 1993 data. This value is not comparable to that of presented above, because of the different equivalence scales used.

After 1989/1990, the beginning of democratic transition, the opportunity for public debate on poverty expanded, although the conditions for social science research worsened inasmuch as the financial system of research institutions based solely on state support is in a permanent crisis.

In 1992, a new series of household surveys started by the TARKI (Social Research Informatics Center), Budapest University of Economic Sciences, and CSO. The Hungarian Household Panel (HHP) surveys conducted yearly provide reliable information on income situations of the same respondents. This panel methodology creates an opportunity for approaching poverty through its changes over time.

After the second wave of HHP, Kolosi et al. (1993) found that 35 per cent of the persons in the sample lived on a per capita income less than the CSO minimum subsistence level. It was an 8 per cent increase compared to the first wave results. Adjusting these percentages to the macro-statistical data of CSO, would have resulted a 10 percentage point lower values for both years. [The official CSO estimate was 15.6 percent in 1992.(Tóth, et al., 1994)] Moreover, the CSO minimum subsistence level calculations are indexed to prices, especially to food prices which increased more in these years more than other goods and services. Since, the later parts of subsistence minimum (other expenditures than costs of a minimum diet and dwelling maintenance) is assumed to be a fixed percentages of food expenditure, the CSO subsistence minima levels are likely to be overestimated by an amount of 500-800 forints. According to Kolosi et al. (1993: p.16), – after these correction – it is safe to say that 20-22 per cent of the population can be defined as poor on the basis of minimum subsistence level, while their proportion was about 8-10 percentage in 1989.

Using a relative definition of poverty, – the lowest per capita income quintile of households - Andorka and Spéder (1993) found that 24.6 per cent of the interviewed persons lived in poor households. This value itself shows, that the average household size of the poor is greater than of the non-poor households. Although, the per capita measure of income poverty tends to overestimate the disadvantage of families with more children, the relationship, that risk of poverty is proportional to the number of children, is valid even when measures of smaller elasticity used. (Tóth et al. 1994: Table A3) Compared to 1992, the most increase in the proportion of the poor showed among children and young adults as it is reported by Andorka and Spéder (op. cit.).

The situation of Gypsy or Roma ethnicity worsened during the past two decades. While Kemény found that 56 per cent of the Gypsy population belonged to the low-income category (less than 600 forints) at the end of the 1960s, in 1992 66 per cent, in 1993 81 per cent of Gypsies were defined as poor in terms of they lived in households belonging to the lowest income quintile. (Andorka and Spéder, 1993; Tóth et al., 1994)

The biggest advantage of panel-type surveys is the unique possibility for studying the persistence and change in poverty. (cf. Figure 4.) Examining the outflow and inflow rates Andorka and Spéder concluded that "nearly half of the poor are not permanently poor". At the same time, about one third of the population experienced poverty at this two-years period. Very small outflow (3.7 percent) and very high inflow (16.7 percent) rates was found among Gypsy respondents. Several socio-demographic factors affect the capacity of escaping from poverty. Beside ethnicity, low educational background, life cycle (childhood and very old age), labour market position (permanent unemployment), growth of the household size (typically birth of a new child) that determine the risk of permanent poverty.

 

Figure 4.

Persistence and Change: What happened to the Poor of 1992 in 1993? Outflow of Households from 1992 to 1993

Source: Andorka and Spéder (1993: p.55, Table 3.2.9) Note: Poor households are those which belonged to the lowest per capita household incomes quintile.

Instead of conclusions

Poverty have become a central social problem in Hungary since the beginning of the economic crisis in 1978. After 1981, public debate started on social policy issues, even if the publicness was often limited and the roles of participants were determined by political factors. However, the political and economic reforms put this problem into foreground, and it turned to be an essential criterion in evaluating the process of democratic transition. Yet, there are relatively few social science research started after 1989/1990 due to the general bad financial situation of Hungary, in a country, where most of the research institutes are dependent exclusively on state support. Thus the challenging task remained for social sciences: to explore the social effects of a uniquely complex process of transition to a market economy based democratic political system.

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