Hungary - Poverty and wealth

Despite the official ideology of equality during the communist period, incomes in Hungary during this period were far from equal. Incomes varied according to social class and place of residence, with incomes in Budapest typically higher than in villages. The situation was much worse during the period between World War I and World War II, however, when average per capita income was very low and income inequality very high. One measure often used to measure income inequality is the ratio of the richest 10 percent of the population to the poorest 10 percent. A survey taken in 1992 suggests that the ratio of incomes of the highest to lowest 10 percent was

GDP per Capita (US$)
Country	1975	1980	1985	1990	1998
Hungary	3,581	4,199	4,637	4,857	4,920
United States	19,364	21,529	23,200	25,363	29,683
Germany	N/A	N/A	N/A	N/A	31,141
Austria	18,857	22,200	23,828	27,261	30,869
SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.

more than 6, making it similar to the income distribution in France and Germany. This level rose to 7.5 in 1996, according to one source, although the official figures from the World Bank place it at 6.3. The differences between social and employment categories has also widened. The social groups who were more affluent before the change in regime were able to increase their incomes in the 1990s faster than inflation, while the poorer groups had incomes that generally lagged behind inflation. In addition, the poorer segments of society were those where unemployment struck the hardest.

A large portion of Hungarian society, about 30-40 percent, suffered a loss in income after 1989. About 30-40 percent, on the other hand, were able to maintain their income, while a smaller percentage, around 10 percent, were able to increase their incomes. This small category included the managers of state and private enterprises, former government officials, and some of the intellectual elite.

Poverty is a problem in Hungary, and one which has worsened since the transition in 1989. According to estimates based on the subsistence level calculated by the Hungarian Statistical Office, in 1996 the proportion of those living under the subsistence level was at least 35 percent. Using the European definition of poverty as being 50 percent lower than the per capita average wage, then 14 percent of the population was poor in 1996.

Distribution of Income or Consumption by Percentage Share: Hungary
Lowest 10%	3.9
Lowest 20%	8.8
Second 20%	12.5
Third 20%	16.6
Fourth 20%	22.3
Highest 20%	39.9
Highest 10%	24.8
Survey year: 1996
Note: This information refers to income shares by percentiles of the population and is ranked by per capita income.
SOURCE: 2000 World Development Indicators [CD-ROM].

Poverty in Hungary is disproportionately high among children, peasants and agricultural workers, housewives, and the handicapped. Geographically, poverty is higher in villages than in urban areas, with approximately 28 percent of the village population living in poverty, but only 18-19 percent of the city-based population and 5 percent of Budapest living in poverty. One social group where poverty is particularly high is the Gypsy ethnic grouping. The Gypsy population has been among the worst off in the transition to a market economy. Some 80 percent of Gypsies lived in poverty, compared to just 15 percent of non-Gypsies in 1996.