POVERTY IN HUNGARY IN 1992-1995
Poverty was taboo in Hungary right until 1981, when the conference of the Hungarian Sociological Association on multiple disadvantageous position was held. More exactly: journals did not publish papers, and publishers did not bring out books which mentioned the occurrence of poverty in the Hungary of those days. The media made even fewer references to poverty. Today the situation is almost the reverse: the media constantly deal with impoverishment and poverty, with its causes, manifestations and consequences. However, we are of the view that data related to poverty are known in a circle which is smaller than it should be, and social scientists have not yet discussed the problematique of poverty in the required detail and depth.
For this reason Ihe present paper attempts to publish and analyse Ihe most important data available from one of the fundamental sources of sociological data, the survey, known as the Hungarian Household Panel. It is not intended to make indisputable statements, and attention is called to the problems of data, methods and concepts, together with doubts that may be raised at the interpretation of dala. With this it is hoped that we will be able to contribute to a professional discourse and to offer an objective basis far such a debate.
It should be stated in advance that only poverty will be dealt with, and impoverishment is not discussed, though in the media the two are often linked and even confused. The somewhat loose expression of impoverishment refers to Ihe process when the real income of the individual or of the household falls. We have no exact data about how much of Hungarian society has experienced the fall of per capita income since 1989. It can be said with a rather rough estimate that at least two thirds of Hungarian society have been impoverished sínce 1989, while the real income of about ten per cent has grown, whereas the real income of Ihe remaining part has been left at its earlier level.
The concept of poverty is much more precise: those people are called poor who are forced to Iive on an income below a certain income level. As it will be seen, of the various income thresholds used here, the proportion of the poor does not appear to be above 30-35 per cent even in the case of the highest one in 1995. The present paper deals with precisely that 30-35 per cent of the Hungarian society.
The source of data
All data are taken from the series of surveys entitled Hungarian Household Panel (Sík, Tóth, 1992, 1993, 1995; Tóth, 1994), with the exception of the macrostatistical data given in Table 1, and of the data of Tables 2 and 4, which are taken from the income surveys of KSH (Central Statistical Office). The Hungarian Household Panel follows the method of similar foreign longitudinal surveys (Duncan, 1984), and particularly that of the West German ones (Hanefeld, 1987; Rendtel, Wagner, 1991; Zapf, Schupp, Habich, 1996). The latter were extended to the former East Germany immediately after reunification.
About 2000 households were included in the original sample of the survey. They were randomly selected, but the sample was strongly concentrated territorially (originally not all the counties were included). About 4500 individuals above the age of sixteen live in these households. A questionnaire was filled in about the households and about every individual above the age of sixteen. In addition, there were about 1200 children in those households; their data figure in Ihe questionnaire ofthe household.
It derives from the nature of panel surveys that these households are visited each year (in May) and are questioned. The questionnaires primarily contain data about incomes and employment-unemployment. In addition - not with annual regularity questions are put in many other topics. Such questions enquire about satisfaction, symptoms of psychological problems, manifestations of anomie and alienation. Data concerning Ihe latter have been utilised in the present paper too. However, many other problems included in the questionnaire are not dealt with, for instance, preferences of political parties, religious sentiments, entrepreneurial inclinations, plans for emigration, etc.
The panel nature of data collection raises several problems, primarily because of the gradually occurring dropouts from the sample. The handling of these problems is not dealt with here; it should suftice to say that dropouts are counterbalanced by weighting, the practice used in the case of similar data collections abroad. In other words, in categories where dropping out is greater, the remaining members of the sample are multiplied by a weight greater than 1. Thus in theory the sample - if it was properly weighted - would retlect the characteristics of the enúre population of the couniry in 1995 as well.
The panel has the special advantage of allowing not only for the study of annual cross-sections, but the situation and characteristics of the same individuals and households in subsequent years, so Ihat the changes can also be analysed. Naturally such a longitudinal analysis raises new methodological problems: it can use only the data of those individuals and households where questionnaires were filled in each year of data collection, and on whose questionnaire the data studied are available (not unknown). This is the reason why the number of cases (already multiplied ones) figuring in the tables may be slightly different.
Concepts and methods
To sociologists it is obvious Ihat here are quite a number of concepts of poverty. In this paper the one based on income is used. In other words we have not applied the concepts of multidimensional poverty and deprivation, invoduced by Tamás Kolosi (1984) and Ágnes Bokor (1985) at the data collection on social stratification of the years 1981-1982. The primary reason is that, apart from poverty based on income, no other data related to other dimensions of poverty (such as poor health status) are available from the panel surveys. This means that there are no data in this paper about those who can be regarded as poor for some other reason than Iheir low income (very poor health status, very bad environment of residence, etc.). In other words the number of the poor, or people in a disadvantageous position is significantly bigger than the poor defined here only on Ihe basis of income. Of course the panel surveys also offer possibilities to smdy poveriy from other angles as well. Mária Gyenei (1995) for instance, tried to define who were poor and who were well off on the basis of the value of homes, equipment, consumer durables, property, etc.; that is on the basis of indices of possessions. According to that calculation, 17.6 per cent of the population was very poor, 12.6 per cent was poor, 43.8 per cent was in a medium material condition, 15. I per cent was well-to-do and 11.0 per cent was rich in 1994.
If one concentrates on the study of poverty defined on the basis of income, even then several borderlines, or thresholds of poverty can be drawn. Two major types can be distinguished: thresholds of poverly based on the concepts of absolute and relative poverty. The former define an income by some theoretical considerations below which no income is acceptable. The various income minimums, particularly subsistence level, fall under this category. The latter consider those people poor who, for some reason, lag behind the average income, or, more simply: those who belong to the lowest income categories. It is not the intention here to enter into disputes on the concepts and thresholds of poverty, we only wish to indicate tiutt five poverty thresholds are used in the present paper. They include the absolute poveriy threshold (subsistence level), and the purely relative poverty threshold (below 50, or 60 per cent of the average).
1. The definition of poverty of people belonging to the lower two deciles, in other words to the lower quintile (the lower 20 per cent) on the basis of the per capita income of the household was used for the first time when the first wave of the household panel was analysed. According to estimates by Tamás Kolosi and Endre Sik (1992), 21.5 per cent of the population lived on incomes lower than the subsistence level of 1992. The proportion of those living below subsistence level has grown ever since. In the interest of comparing the results of the subsequent waves of the household panel we have applied this poverty threshold.
2. As long as KSH calculated and published the subsistence level, naturally we also used that threshold. This concept of poverty is particularly important when we wish to compare today's poverty with the 1980s, as the KSH subsistence level and the household income surveys of KSH offer an opportunity to assess the size of poverty in the 1980s and to study its composition.
3. As proposed by the World Bank, we used the minimum pension as a poverty Ihreshold in data compilations prepared for the World Bank. The minimum pension can be interpreted as a subsistence level tacitly accepted by the state social policy. It is one of the pamdoxes of the Hungarian situation that the minimum pension (just as the minimum wage) is lower Ihan the subsistence level calculated by KSH.
4. Fifty per cent of average income is a very relative poverty threshold. Accordingly, those whose per capita weighted income is lower than Ihe average per capita weighted inrnme are regarded as poor.
5. When analysing the 1995 wave, we used 60 per cent of the average as poverty threshold.
We do not wish to take stands for any of the concepts and thresholds of poverty. However, each one has its specific advantage, and each is suited for answering certain special research problems. It is clear that the lower the income where the upper limit of poverty is drawn, in other words the less people are poor by our definition, the sharper the social differences of the occurrence of poverty would be. For instance, the lower the poverty threshold is, the bigger the over-representation of Roma ethnicity is among the poor.
A basic methodological question of poverty research and of income surveys in general is whether to calculate with the simple per capita income, or to apply some kind of weighting by the age and economic activity of the members of the household, or by the size of the household. With weighting normally the following considerations arise: 1. according to public opinion the needs of children are smaller than those of adults, 2. the needs of the economically inactive (or elderly) are smaller than those of active adults, 3. with the increase in the number of members of households a certain economy of size, or saving emerges in the field of expenditure; for instance, the cost of heating does not increase in proportion to the growth of membership.
There is no unambiguous proof of which weighting best reflects the actual consumption of households. However, we are of the view that the use of weighting describes the poverty of the households better than per capita income, or household income can do. The use of weighted income dala is supported by the fact that they are internationally widespread. Such weighted income was applied at the poverty thresholds of 50, or 60 per cent of average, and of the minimum pension. With these concepts of poverty those people were included among the poor whose weighted, per capita household income was less than the corresponding poverty threshold. A very simple equivalence scale, used by OECD, was applied at weighting, the flexibility of which is e = 0.73 as a function of the membership of household, in other words, the weight of the first member of the household was 1.0, the weight of the second member was 0.73, that of the third was 0.53, etc.
Macroeconomic indices and changes in the inequality of incomes
The growth of poverty may have, and does have two reasons in Hungary: the unfavourable changes of the macroeconomy, in other words the fall of all incomes, and the growth of the inequality of incomes.
It would be wrong to forget that macroeconomic processes had rather unfavourable changes already in the 1980s: the GDP was almost stagnant; as a result the real value of the real income of the population hardly increased, and the index of real wages within it has been constantly falling since 1978. However, after 1989 far more unfavourable processes unfolded.
We do not wish to embark on the issue of how big a role was played in this by structural transformation, inevitably accompanying the change of the economic system, by destruction considered "creative", by the unexpected economic depression occurring in the world economy as a whole, and particularly in the developed Western countries, and by the collapse of our export markets in the former socialist countries. However, it is beyond doubt that economic recession is far deeper and lasting than was expected in 1989-1990 either by the Hungarian economists and politicians, or by the vast majority of foreign experts. It may also be added that as far as we know, recession is much graver and prolonged in the former socialist countries east and south of us and in the majority of the successor states of the former Soviet Union.
The GDP has dropped by about 21 per cent (Table 1). According to macrostatistical data the fall of the per capita real income of the population was less, only about 11 per cent up to 1993. The fall of real consumption by the population is somewhat less. Two negative processes have directly affected the population and its incomes: 1. inflation, as a result of which consumer price level was about four times as much in 1995 as it was in 1989, in other words, the real value of an identical nominal income is only one fourth what it was in 1989; 2. the growth of unemployment. It should be added that the fall in employment (retirement, often early retirement, withdrawal from the labour market to the household) is more than double the unemployment peak of 13 per cent.
A decisive issue from the angle of the changes in poverty is how the economy fared during the past two years. Signs of the slowdown and end of economic recession could be sensed already in 1993; in 1994 the GDP, the real income of the population and real wages increased, unemployment decreased. In March 1995 the government considered the well known package plan was needed because of the large deficit of the balance of payment and of the budget. The measures introduced changed the new tendencies of 1994, indicated above. According to preliminary dala, to be regarded as estimates only, in 1995 the GDP continued to grow, but real wages fell sharply, together with the significant fall of the real income of the population, inflation accelerated, and the fall of unemployment seemed to stop by the end of the year. As a result of the fall of real incomes, poverty has probably grown; it is bigger than indicated by the data of the household panel collected in May 1995 and covering the incomes of the previous 12 months. Nevertheless, it can be said that we have passed the lowest point of economic recession, so poverty need not necessarily grow in the coming years because of the falling GDP.
Income inequalities point in the opposite direction (Tables 2 and 3). We have dala about the changes of income inequalities since 1962 from the household income surveys of the KSH, and since 1992 from the Hungarian Household Panel. It should be noted however, that data derived from the two different sources are not perfectly comparable, as the KSH dala are the share of the deciles of individuals in the total income, ranked in order on the basis of the per capita household income, whereas the dala of the Household Panel are the share of the deciles of households in the total income, ranked in order.
However, the trends of income inequalities can be inferred. There were income inequalities in the socialist period as well, and not insignificant ones at that. This is one of the scientific achievements of decisive importance of the KSH dala collections (Ferge, 1969). From 1962 up to about the late 1970s income inequalities were decreasing slowly and not along a straight line, but they began to grow from the mid-1980s onwards. After the systemic change income inequalities have suddenly and greatly grown, and while they seemed to have stabilised (or perhaps even decreased a little) by 1993, again started to grow in 1994 and 1995. It can be stated roughly that the income inequalities which used to be on the level of the Scandinavian countries in the socialist period, have increased to the level of West Germany, or to the average level of West European countries after the systemic change. A big question is how income inequalities will change in the future: whether they will remain on the Ewopean average, or grow further, to reach the level observed in the United States, or even in some Latin American countries. If the latter tendency prevails, it will not be promising for the reduction of poverty even if the GDP grows in the coming years.
The per capita household incomes by social stratum (Tables 4-5) give information on which strata are in a more privileged, and which are in a more adverse situation, and which strata have been the great losers during the course of the changes of income inequalities described above, and which strata have been able to retain, or even improve their real income. The KSH data and the data of the Household Panel cannot again be fully compared, as-the KSH gives figures about the per capita income of households categorised on the basis of the head of the household, whereas the Household Panel data show the per capita average household income of persons above sixteen.
Yet the changes of income differences by stratum can be inferred from those data. In socialism toortt was the higher managers and professionals who occupied the summit of the income hierarchy, the other white collar workers and skilled workers occupied the middle, and the unskilled workers and agricultural occupations were at the bottom. After the systemic change the income position of higher managers has not only improved strongly if compared to the national average, but also in an absolute sense, that is in respect of real income, and seems to improve yearly. On the average, professionals have been able to retain or improve their income situation a little, the former middle strata continue to occupy the middle of the hierarchy, though the average of their real income has decreased, while the 'lower' strata continue to occupy the bottom. But the tendency, shown by the Household Panel data, namely that all those who do not follow a usual, or 'regular' occupational career, have a far worse income situation, is regarded as more important. Extending our inference, it means that those households where one or more members belong to these 'non-regular' categories, are in a significantly disadvantageous position. These categories are the following: primarily and naturally the unemployed, but also those on disability pension (who retired before reaching retirement age), persons living on the pension of their deceased spouse (who do not receive a pension on their own right), as well as women engaged in household duties and other adult dependents. The old age pensioners do not belong to this category. At any rate, the conclusion can be drawn that those whose employment has ceased for some reason or other - unemployment, early retirement - or, who do not and did not do some gainsome work, constitute the most disadvantaged stratum of the society and their disadvantages have visibly increased during the past few years.
Since there are often doubts about the reliability of the stated income data, the differences among these social strata in respect of certain other indices, like homes, consumer durables and lifestyle were also studied. All the indices were developed so that we assumed the lack of an element of equipment in the home, of a consumer durab(e, or the lack of trips abroad as indices of social disadvantage, enabling us to draw inferences about low incomes (Table 6). It can be said that these indices have confirmed the differences of social strata and their order identified on the basis of income data.
In addition to the social and occupational position, the place of residence also involves significant social advantages and disadvantages. There has been a significant difference in the income of Budapest and the other cities and settlements (Table 7). This difference however, was slowly decreasing during the socialist period (up to 1982), but it has grown very strongly a8er the systemic change and still seems to be growing. If we consider only those settlements which are located in micro regions qualified as backward, the income disadvantages of the latter seem to be even more significant.
The extent of poverty
In the 1980s the number and proportion of those living on incomes less than the subsistence level was estimated to be around one million, that is ten per cent. It should be noted that even in those days there were different estimates of the number of the poor. The figure of one million is obtained if those who live below the national average subsistence level are regarded as poor. If the starting point is the different subsistence level of households of different composition and place of residence, and the number of the poor is assessed separately in these categories of household, then a somewhat smaller estimate can be obtained.
Tamás Kolosi estimates the proportion of those living below the KSH subsistence level to be 22 per cent in 1992, 24 per cent in 1993, and 32 per cent in 1994. He made this estimate by adding the non-stated income to the incomes recorded by the Household Panels which were stated at the macro-statistical data collections. In 1995 the KSH did not publish data concerning subsistence level, therefore the 30-35 per cent, estimated for 1995, is simply based on the fact that the average increase had hardly any decrease from 1994 to 1995 and the share of the first three deciles in the total income did not change if compared to 1994. Whatever the opinion of social scientists may be about the subsistence level calculated by KSH, it is absolutely clear that poverty has increased very significantly, by at least three-fold.
The spread of poverty is not so extensive if other concepts of poverty are employed. By definition the lowest quintile always contains 20 per cent of the population, hence this concept of poverty is unsuited for identifying the actual extent of poverty. The relatively moderate growth of the proportion of those with less than 50 per cent of the average income essentially expresses only the effect of the growth of inequality. According to the poverty line "below 60 per cent of the average", used only in 1995, 22.7 per cent was poor in that year. Finally, the proportion of those having an income below the minimum pension has increased relatively less because the minimum pension has been raised annually but significantly less than the price index, meaning that the minimum pension has been equivalent to an ever lower real income each year.
The composition of poverty
The issue of who are the poor, the members of what demographic, social, etc. groups constitute poverty is far more interesting theoretically as well as from a practical social policy point of view than the number and proportion of the poor and their tendencies. Here the issue is put as follows: how many should be classified under poverty from the different demographic, social, etc. categories; what percentage would fall below the different thresholds of poverty; in other words: how big is the incidence of poverty by group.
The issue of poverty is often formulated in the American and West European literature on social science and in public discourse by saying that the society of "two thirds-one third" has developed, in which two thirds of the society enjoy the benefit of economic growth and of additional incomes, they live in increasing wealth, whereas one third is le8 out of these benefits and is poor in the long run, so much so, that it is practically excluded from society (Glotz, 1984).
This issue appears differently in the present Hungarian disputes. Usually it is assumed that a very wealthy and increasingly rich one tenth occupies the summit of the society, whereas about 30-40-50 per cent of the society is becoming impoverished at the botlom of the hierarchy, sinking into lasting and almost hopeless poverty. If the proportion of the poor is analysed by demographic and social categories in the case of different poverty thresholds, then the outlines of four kinds of poverty emerge (Tables 9 and 11): 1. traditional poverty about which we had quite precise knowledge already during socialism, 2. new poverty which has appeared since the systemic change, or, has drawn attention only since that point of time, 3. demographic poverty, 4. ethnic poverty.
1. Two factors are known from the socialist period which caused significant income disadvantages and were therefore accompanied by a far bigger than average occurrence of poverty: i. belonging to the strata of unskilled labourers and to that of the agricultural blue-collar workers with low school education as their corollary, ü. village residence. Both factors continue to be accompanied by a big risk of poverty, both (otherwise overlapping) social and residential strata have been significantly impoverished, in other words, they undoubtedly belong to the losers of systemic change. Yet it is not they who are the poorest and the greatest losers but the 'new poor'.
2. The unemployed have been the entirely 'new poor' since the systemic change. However, the retired disabled, pensioners on wido~s pension, housewives and other adult dependents should also be classified under this heading, in other words, all those who have no job producing regular income, or who do not enjoy a pension paid aRer a career of more or less fall employment. The 'new poor' come from among the 'traditionally poor' strata to a large extent, because they have low school education, they are unskilled workers and peasants, and unemployment is much higher than average among the rural people and the members of these strata redre as disabled to a much higher proportion, they do not have a pension on their own right (and their entitlement is only as widows), and it happens relatively often that in families belonging to this stratum the wife does not have a gainsome occupation and there are other dependent adults as well. All this corroborates the commonly known fact that if somebody drops out of regular occupation this becomes one of the decisive factors of his life, causing poverty.
3. We have already noticed the tendency in the socialist period that, as contrasted to the former situation, an increasing number of children may be classified under the heading of the poor besides the older generations. Incidentally, this tendency can be observed in the developed countries (Rainwater, 1988; Smeeding, 1988; Smeeding, Torrey, 1988). This tendency, however, seems to have grown stronger after the systemic change.
Here a brief explanation is required to understand why the proportion of the poor is smaller among the elderly, and particularly among those aged 60-69. The likely cause is that the majority of the elderly population have acquired the right to a relatively high pension, and though the real value of pensions has decreased, the income situation of the population in retirement age has deteriorated less than the national average, partly because the real value of pensions could be protected against inflation to some extent (at least the pensioners were not threatened by unemployment, the major risk factor of the active age group), and partly because the old age population is being constantly replaced demographically, the older people on smaller pension die and are replaced by younger ones with higher pension (the real value of whose pension will decrease in the coming years). However, it should be stressed that the fact that the proportion of the poor is not particularly high among the elderly, does not mean that there are not groups among the elderly who live in abject poverty. Such are the people on widow's and disability pension mentioned above, people who have retired early during the past few years. The elderly living alone (in single member households) may also belong to this group. A large part of the latter are old rural widows. Finally there are the oldest people whose pension has sunk to the proximity of subsistence level, and who are unable to obtain even a minimum of additional income (for instance, by cultivating their garden around the house) because of their health condition.
Whatever definition of poverty is employed and whatever weighting, or scale of equivalence is used, today the poverty of children in Hungary is a very conspicuous phenomenon. We agree with the statement of the Florence research centre of the UNICEF (1993) that children are among the great losers of systemic change in East Central Europe. It is considered to be highly problematic from the angle of the future of Hungarian society that a significant part of our children are brought up under poor conditions at least in part of their childhood. This may be highly detrimental to many different sides of their life, from nutrition to progress in school.
4. Last but not least - and it should be stressed - there is poverty of ethnic character in today's Hungary. It was known earlier as well that a much larger than average part of the population of an estimated half a million people of Roma ethnicity is poor. However, the Hungarian Household Panel offers an opportunity for the first time to make comparisons between the income relations of the Roma and non-Roma population. The reason being that earlier there was no possibility of identifying the ethnic origin of people in the nadonal surveys. When the panel surveys were made, the dala collector made notes (without asking questions) whether he/she considered the household questioned a Roma one. No doubt this is a far from perfect method but we were unable to find a better one. It should also be noted that the number of failed interviews was much higher in the case of Roma people, thus, as contrasted to the expected 5 per cent, a much lower proportion, only 3.8 per cent belonged to the Roma ethnic group in the samples of 1994 and 1995. Despite all these reservations the very fact that the 'overrepresentation' of the poor in the case of every poverty threshold is the highest among the Roma people, calls attention to the fact that they constitute the part of Hungarian society most endangered by poverty, and in all probability it is they who are the greatest losers of systemic change.
If the proportion of the poor is studied by types of households and not by individuals, some supplementary information may be obtained (Tables 10 and 12). There are more poor among the households with children than among the childless ones. The proportion of the poor is particularly high among the households with three and more children. The proportion of the poor is particularly high in households of the type of 'one parent and child'. If the head of the household is unemployed, it means a grave disadvantage to the household.
Lasting and transitory poverty
One of the most remarkable and most disputed results of foreign household panel surveys has been that poverty in those societies was mostly transitory, and people found poor in a given year would raise above the poverty threshold in the next one or several years (Duncan, 1984; Headey, Habich, Krause, 1990: Bernsten, Rendtel, 1991).
The results of the Hungarian Household Panel (Tables 13 and 14) also show that the movement of the population surveyed is very big between the income deciles. More than two fifths of those belonging to the lowest decile did not belong to that one in the next year, and about half of those leaving the lowest decile have jumped upwards by at least two deciles. Conversely, two thirds of those belonging to the lowest decile had not been there in the previous year.
In relation to this result one has to state several kinds of reservations: 1. crossing the threshold of a decile does not mean emerging from poverty, particularly if the average incomes and thus the limits of deciles have sunk, 2. if demographic events such as the birth of a child, increasing the number of household members, or a member of the household dies, retires, avails him- or herself of child care leave, etc., play a significant role in the annual changes of the income situation besides becoming unemployed or newly employed.
The most doubtful problem is how the earlier 'decile careei' of the individuals and households influences movement upwards or downwards from the decile position just occupied. In other words: how big is the possibility of a person who has emerged from the lowest decile to, let us say, the third, or fourth one, of sinking back to one of the lowest ones next year. A comparison of the quintile posidons of the years 1992 and 1995 (Table 15) suggests that such major shifts did not take place during those three years as would appear if the changes were added up one by one.
In addition to the study of the transidon matrixes between deciles or quintiles, the durability of poverty was also analysed so that the persons about whose income we had dala in 1992, 1993 and 1994 as well, were classified according to how many times they fell below the various poverty thresholds during those three years. Thus, if subsistence level is chosen as poverty threshold (as it was seen, the proportion of the poor has been growing each year on that basis) then 10 per cent of the interviewees were poor 'at length' (in all the three years), 32 per cent were poor transitorily (for one or two years), and 59 per cent were not poor. Naturally, the proportion of those in lasting and transitory poverty is naturally smaller if poverty is defined by the lowest income quintile, below 50 per cent and below the minimum pension. However, our main conclusion must be that at present the bigger part of poverty in Hungary is of transitory nature, the majority is able to emerge from poverty temporarily or with a lasting effect. Yet it does not at all mean that the problem of lasting poverty is negligible. On the contrary, the problem of lasting poverty deserves an extraordinary attention from a theoretical as well as social policy point of view. Therefore, who are those who were poor at length, during all the three years is a particularly interesting question (Table 17).
Such an analysis brings out in bold relief which are the demographic and social categories particularly threatened by poverty in present-day Hungary: those first of all who belong to the Roma ethnic group, almost half of whom belonged to the lower quintile during all the three years, together with the unemployed, those who work in the household only and other adult dependents. It should also be noted how high the proportion of the long-term poor is among children between 0-19 and the young.
The consequences of poverty: dissatisfaction, psychological problems, anomie and alienation
In the individual waves of the Hungarian Household Panel, questions were put about satisfaction with the different dimensions of individual and social life, about the occurrence of somatic and psychological symptoms suggesting problems of psychological life, and about opinions and attitudes related to anomie and alienation.
It is known from other sociological dala collections (Rose, Haepfer, 1994) and public opinion surveys that dissatisfaction with income, with living standards, with the economic and political situation of the country is very widespread in Hungary. Following the pattern of the German dala collections, we have studied dissatisfaction by requesting the interviewees to indicate their dissatisfaction with the different dimensions of their own life and the condition of the country along a scale of 0 (totally dissatisfied) to 10 (totally satisfied). We regarded as dissatisfied those who indicated 0-3 on the scale (Table 18). There are unambiguously more people among those who belong to the lowest quindle, that is among the poorest, who are dissatisfied with their income, living standards, homes, future perspectives and the entire pattern of their life. Thus the conclusion can be drawn that dissatisfaction with the material conditions of individual life reflects well the objectively more difficult situation. Correlation is much less strong between poverty and dissatisfaction with such non-material, human dimensions of life as the family, relatives and friends, colleagues and work in general. Dissatisfaction with the health condition is not bigger in the lowest quintile than in the next two. It is conspicuous that dissatisfaction with the economic situation of the country is almost equally big in every quintile and even dissatisfaction related to the possibility of citizens' political intervention, that is with the funetioning of democracy does not show much difference by income. Therefore the conclusion can be drawn that the poor are not dissatisfied and complaining in general, but they are dissatisfied with those very concrete material conditions of their life where they are significantly disadvantaged.
According to studies by Mária Kopp and Árpád Skrabski on mental and health condition (1992) the proportion of those suffering from different psychologicál problems was rather high and growing in Hungary in the 1980s. In the Household Panel survey of 1993 some questions - taken over from the German data collections - were put which tried to explore the frequency of somatic and psychological symptoms indicating psychological problems. A study was made of whether these symptoms were more frequent among the poor than among the well-to-do (Table 19). It was found that all those symptoms - such as headache, palpitations, nervousness, exhaustion, trembling, worry for one's health condition, as well as feeling unlucky, the inability to overcome worries, and becoming confused if faced with more than one task at a time, are far more frequent among people in the lower quintile than among the better off. Thus the poor not only have to live on a much smaller income but they also suffer more often from psychological problems. This also leads to the conclusion that the main cause of the high frequency of such psychological problems should be sought in the bad material and income situation in Hungary.
Elsewhere (Andorka, 1994) we have expounded the hypothesis that a very deep and cridcal anomie and alienation had developed in the socialist period. Anomie and alienation were regarded as the slightly different sociological concepts of the same phenomenon, more specifically what is usually described by sociology under the terms anomie and alienation, are actually different sides of the same social crisis. In the 1993 wave of the Household Panel we tried to approach this phenomenon again with questions taken from German data collections. The answers received (Table 20) suggest the inference that many more people gave a positive answer in the lowest quintile than among the well-to-do in respect of the two dimensions of anomie and alienation, that is powerlessness and the meaninglessness of life. It should be noted however, that mentioning loneliness hardly shows any difference by income, suggesting that human solidarity still asserts itself among the poorest. It is even more interesting that again there does not seem to be any difference between the poor and the rich in respect of violating norms of behaviour and rules. Thus the rather frequent violation of norms which can be observed in Hungarian society, cannot be simply attributed to poverty and impoverishment, because a far deeper crisis of norms is involved, which seems to be pervasive in every stratum of the society. This result also warns that the different aspects of anomie and alienation - such as the sense of powerlessness, the sense of the meaninglessness of life, loneliness and an inclination to violate norms should not be lumped together in the analysis, but they should be studied and interpreted one by one.
Some closing thoughts
We do not wish to state final and ultimate conclusions. However, we think that some ideas, extending over a broader circle, should be raised.
It is beyond doubt that poverty has grown sharply during the past few years and it hits a significant part of the Hungarian society. It is obviously a grave ordeal for the majority of the Hungarian society even if emergence from poverty does not seem to be impossible. Poverty is accompanied by a great degree of dissatisfaction, serious psychological problems and stresses. The different aspects of anomie and alienation, first of all powerlessness, the sense of vulnerability and the loss of faith in the meaning and understanding of life are very widespread among the poor.
The growth of poverty not only affects the poor gravely, but it affects and even endangers the development of the entire Hungarian economy and society. This statement can be supported primarily by the obvious fact that the society has to provide at least for a minimum care for those who have sunk into poverty, for instance, for giving aid to the unemployed, which necessarily means a significant economic burden. Taking a broader view, it could be said that the development of a modern economy primarily depends on how educated and skilled the members of a society are, how far they can meet the rapidly changing demands of modern technology and economy. The children of poor families have little chance of acquiring the necessary school education and knowledge.
Extensive poverty means an even bigger danger for social integration. Though it has to be admitted that societies in general, and modern societies in particular are characterised by the existence of conflicts among the groups of different interest, attitude and culture, yet we wish to stress our conviction that if a consensus is missing among these different groups, at least in respect of the basic institutions of the economy, society and politics, then conflicts may become so acute that they threaten the fimctioning of the economy and political democracy. An extensive, lasting and hopeless poverty is obviously a very grave source of conflict.
What can be expected and what can be done in the light of these thoughts in respect of the fiUure of poverty? Obviously, the growth rate of the GDP and how lasting it is are factors of decisive importance. If inequalities of income do not change, then the grow2h of per capita GDP would sooner or later bring about the growth of the per capita real income, which would automatically reduce poverty.
However, it is a big question whether income inequalities will remain at the present level, or, continue to grow. It can hardly be stated that a further growth of income inequality would be necessary or desirable. Since we have already reached the West European level of inequality, nothing justifies a further shifl in the direction of Latin American inequalities. It cannot be stated on a theoretical and philosophical level either that the growth of income inequality is desirable. One should remember the thesis of John Rawls (1972), who is perhaps the most prominent American liberal social philosopher, according to which inequalities can be accepted as long as they result in the growth of income and the improvement of living standards in the medium run, in other words: as long as they speed up economic growth.
Social policy is one of the means of moderating inequalities and mitigating poverty. Particularly in a period when poverty is growing, it is essential to have the safety net offered by social policy which protects people with low incomes from impoverishment. We are aware that the present social policy represents a rather big burden for the budget. In this situation however, its reform is desirable so that it can concentrate more on the poor and a drastic reduction of welfare support should be avoided by all means. Hopefully our empirical studies and analyses of poverty will promote the identification of those social and demographic groups which deserve the special attention of social policy because of the frequent occurrence of poverty among them.
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Table 1 Main macro-statistical indices of the Hungarian economy, 1989-1994
* Those people who have a job from where they have an income. Persons on child care aid and allowance were not counted under this heading.
Table 2 Decile distribution: The share of population deciles by per capita income of the total of personal incomes, 1962-1987
Table 3
Distribution of deciles: the share of household deciles by the per capita income in the total of personal income, 1992-1995
Table 4
Per capita household income in households belonging to different social strata, 1962-1987
Table 5
Per capita average annual income by social stratum, 1993-1995
1. As a percentage of the average per capita income of the 16 year-old and older interviewees.
2. The present and all subsequent Tables do not include data concerning pupils due to their special position, or the data of those who have gainsome activities besides their pension, or of the helping family members because of the small number of such cases. But naturally they are also included in the 'total'.
Table 6
Home equipment, possession of selected consumer durables and trips abroad, 1994
Table 7
Per capita average annual income by place of residence, 1962-1995
Table 8
Proportion of the poor in the population in the case of different poverty thresholds, 1992-1995
Table 9
Proportion of the poor by ege group, social stratum and ethnicity in the case of diff~rent poverty thresholds, 1994
Table 10
Proportion of poor households by type of household, number of children, place of residence, the unemployment of the head of the household and ethnicity in the case of different poverty thresholds, 1994
Table 11
Proportion of the poor by age group, school education, place of residence, social stratum and ethnicity in the case of different poverty thresholds, 1995
Table 12
The proportion of poor households by the age of the householder, by type of household, membership and by the number of children in the case of different poverty thresholds, 1995
Table 13
Changes of the position of individuals in deciles from 1993 to 1994, distribution of the 1993 deciles by the 1994 situation
Table 14
Change of individuals' position in deciles from 1993 to 1994, distribution of the 1994 deciles by the 1993 situation
Table 15
Change of individuals' position in quintiles between 1992 and 1995
Table 16
The frequency of individuals' poverty in the case of different poverty thresholds from 1992 to 1994
Table 17
Proportion of lasting and transitory poverty in the case of the lowest quintile as poverty threshold by age group, social stratum and ethnicity, 1992-1994
Table 18
Proportion of the dissatisfied by income quintiles, 1993
Table 19
Somatic and psychological manifestations of the state of mind among people aged 16 and above who belong to the lowest and topmost quintiles, 1993
Table 20
Manifestations of anomie and alienation among persons of 16 and older, belonging to the lowest and topmost quintiles, 1993
