This study uses linked administrative data on live births, hospital stays, and census records for children born in Hungary between 2006 and 2011 to examine the relationship between poor housing quality and the health of newborns and children aged 1-2 years. We show that poor housing quality, defined as lack of access to basic sanitation and exposure to polluting heating, is not a negligible problem even in a high-income EU country like Hungary. This is particularly the case for disadvantaged children, 20-25% of whom live in extremely poor-quality homes. Next, we provide evidence that poor housing quality is strongly associated with lower health at birth and a higher number of days spent in inpatient care at the age of 1-2 years. These results indicate that lack of access to basic sanitation, hygiene, and non-polluting heating and their health impacts cannot be considered as the exclusive problem for low- and middle-income countries. In high-income countries, there is also a need for public policy programs that identify those affected by poor housing quality and offer them potential solutions to reduce the adverse effects on their health.

The gender gap in competitiveness is argued to explain gender differences in later life outcomes, including career choices and the gender wage gap. In experimental settings, a prevalent explanation attributes this gap to males being more (over)confident than females (we call this the compositional channel). While our lab-in-the-field study using data from students in 53 classrooms (N$>$1000) reproduces this finding, it also uncovers a second, potentially more impactful channel of confidence contributing to the gender gap in competitiveness (the preference channel). To disentangle the two channels, we propose a more precise measure of confidence based on whether the subjects’ believed performance rank exceeds, coincides with or falls short of their actual performance in a real-effort task. We label categories of this Guessed – Actual Performance (GAP) difference as overconfident, realistic or underconfident, respectively. Surprisingly, there is no gender difference in competitiveness within the over- and underconfident subgroups, while a significant gender gap exists among the realistic. So, even if both genders had the same level of confidence, a persistent gender gap in preference (or taste) for competition would remain in the realistic group. This finding is robust across all specifications, challenging previous theories about the overconfidence of men being the sole driver of the relationship between confidence and the gender gap in competition.

We evaluate the effect of a drastic cut in potential benefit duration, reducing the maximum length of UI benefits from 9 to 3 months in Hungary at the end of 2011. We rely on rich longitudinal matched administrative data, which allows us to obtain information on a large sample of UI benefit claimants, and we use matching methods to evaluate the effect of the benefit cut. While UI claimants found jobs more rapidly as a result of the reform, this is a relatively small change, and we find only negligible negative effects of reemployment wages overall. The notion that changes are due to the reform is reinforced by the result that the effect on employment is largest for the group where the ‘bite’ of the reform was the largest. Our heterogeneity analysis reveals that the drastic cut seems to have reduced moral hazard for the most employable (those with tertiary education) and forced them to be ‘less picky’. This means that they took up lower wage jobs, but this effect was only temporary. Overall, the reform led to significantly lower income for over 60 percent of jobseekers, since the increase in labour income did not compensate for the large reduction in UI benefits paid; while only benefiting less than 10 percent of jobseekers, over a two-year horizon.

The Earth’s climate is projected to warm significantly in the 21st century, and this will affect human societies in many ways. Since sleep is a basic human need and part of everyone’s life, the question of how temperature affects human sleep naturally arises. This paper examines the effect of daily mean temperature on sleep duration using nationally representative Hungarian time use surveys between 1976 and 2010. Compared to a mild temperature (5-10 °C), colder temperatures do not influence sleep duration. However, as daily mean temperatures rise, sleep duration starts to strongly decline. The effect of a hot (>25 °C) day is −12.4 minutes, but if preceded by a few other hot days, the effect is even stronger, −22.7 minutes. The estimated sleep loss is especially large on weekends and public holidays, for older individuals, and men. Combining the estimated effects with temperature projections of twenty-four climate models shows that the warming climate will substantially decrease sleep duration. The projected impacts are especially large when taking into account the effects of heatwave days. This study also shows that different groups in society are likely to be affected in significantly different ways by a warming climate.

As part of the Recovery and Resilience Plan (RRP, 2023), the Hungarian government pledged to reform the pension system. The main themes are sustainability and adequacy. The pension plan is to be discussed publicly and put into law by March 2025. The last detailed official pension study was the 2016-discussion paper of the Hungarian National Bank which should be updated. The present study is a private work which may contribute to the improvement of the current pension system. The current and the projected states of the Hungarian pension system are outlined, and then simple and complex reforms are formulated. Naming just two reform steps, I start with the simplest step: the return to public discussion steered by a revitalized Fiscal Council and end with the most complex: the introduction of the flexible (variable) retirement age.

The working paper examines the role and development of the Central and Eastern European venture capital sector in the five years between 2016 and 2020. This period includes both the end of the recovery after the economic crisis in 2008 and the downturn due to the coronavirus crisis in 2019. A statistical analysis of venture capital funds and investments in the CEE region confirms that, while the overall position of the region in Europe did not change over the period under review, the differences between countries in the region increased sharply. The northern part of the region rivals the most developed countries in Europe, the central part is driven by an abundance of public resources, while the venture capital sector in the south is only in its infancy. The size of the venture capital funds in the region is far below the European average, so the start-ups only have a chance to become successful if they are involved in the international flow of venture capital. The role of the government in the funds in the region is extremely high, but the selection between companies is therefore not based solely on market considerations. Rent-seeking behaviour goes against the essence of venture capital. As a result of the deterioration of the global political and economic situation, the entire Central and Eastern European region is losing its ability to attract capital.

How do temporary spells of absence from work affect individuals’ labor trajectory? To answer this question, we augment a `wage ladder’ model, in which individuals receive alternative take-it-or-leave-it wage offers from firms and potentially suffer accidents which may push them into temporary absence. In such an environment, during absence, individuals do not have the opportunity to receive alternative wage offers that they would have received had they remained present. To test our model’s predictions and to quantify the importance of foregone opportunities to climb the wage ladder, we use linked employer-employee administrative data from Hungary, that is linked to rich individual-level administrative health records. We use unexpected and mild accidents with arguably no permanent labor productivity losses, as exogenous drivers of short periods of absence. Difference-in-Differences results show that, relative to counterfactual outcomes in the case of no accidents, (i) even short (3-12-months long) periods of absence due to accidents decrease individuals’ wages for up to two years, by around 2.5 percent; and that (ii) individuals reallocate to lower-paying employers. The share of wage loss due to missed opportunities to switch employers is between 7-20 percent over a two-year period after returning to work, whereas at most 2 percent is due to occupation switches. Our results are robust to (a) instrumenting absence with having suffered an accident, (b) exploiting the random nature of the time of the accident, and (c) within-firm matching of individuals with and without an accident and subsequent absence spell.

Research on the effect of in utero shocks on health at birth may be influenced by in utero selection. This study outlines a conceptual framework and shows that the results of the standard empirical approach are biased if (i) the exposure changes the probability of fetal death and (ii) health differences exist between deceased and surviving fetuses. Furthermore, an empirical example is provided to illustrate, the potential importance of fetal selection. Examining the impact of heat on birth weight, I find that accounting for fetal selection substantially increases the heat effect compared to the standard approach. These results suggest that incorporating the distorting effect of fetal losses into the estimations may be critical in some cases to provide more informed guidance for public policy.

Disability benefits are costly and tend to reduce labor supply.  While costs can be reduced by careful targeting, correcting past eligibility rules or assessment procedures may entail welfare costs. We study a major reform in Hungary that reassessed the health and working capacity of a large share of beneficiaries. Leveraging age and health cutoffs in the reassessment, we estimate employment responses to loss or reduction of benefits. We find that among those who left disability insurance due to the reform, 57% were employed in the primary labor market and 38% had neither employment nor benefit income. The consequences of leaving disability insurance sharply differed by pre-reform employment status. 62% of those without pre-reform employment did not work after exiting disability insurance, whereas this ratio was only 14% for those who had some employment in the pre-reform year. The gains of the reform in activating beneficiaries were small and strongly driven by pre-reform employment status. This points to the importance of combining financial incentives with broader labor market programs that increase employability.

We study variation in healthcare utilization across geographies and socioeconomic groups in Hungary. Exploiting migration across geographic regions and relying on high-quality administrative data on healthcare use and income we show that the role of place-specific supply factors is heterogeneous across types of care and across socioeconomic groups. Overall, place-specific factors account for 68% of the variation in outpatient spending and 35% of the variation in drug spending, but almost none of the variation in inpatient spending. Place effects explain four-fifth of outpatient spending variation for non-employed working-age individuals, but less than two-fifth for individuals with above-median wage incomes. There is a positive association between place effects and outpatient capacity, especially for low-income individuals. These results suggest that access to healthcare varies especially for low-income people even in a context with universal coverage.

In Hungary, employees could claim sickness insurance benefit within 3 days of job-loss, which would enable them to extend their benefit duration by up to 90 days. The maximum number of days of this ‘passive sickness benefit’ was halved in 2007. We first investigate whether claiming passive sickness benefit was related to the monetary advantage relative to claiming unemployment insurance benefits. Then, we explore the effect of potential benefit duration on the transitions to stable employment relying on the variation induced by the policy change. Relying on high quality longitudinal matched administrative data we can estimate these relationships while using controls for employment histories and healthcare spending. On the one hand, we find that passive sickness benefit claiming behavior was indeed correlated with the financial gains. On the other hand, we find only a very small and insignificant immediate effect on transitions to employment when maximum benefit duration was cut by 45 days. However, we find that job finding hazard on the week after benefit exhaustion increased more for individuals who were not on sick leave just prior to job-loss. Our finding is suggestive that a non-negligible proportion of this group were subject to moral hazard.

Using data for 201 regions (NUTS 2) in Europe, we examine the mortality burden of the COVID-19 pandemic and how the mortality inequalities between regions changed between 2020 and 2022. We show that over the three years of the pandemic, not only did the level of excess mortality rate change considerably, but also its geographical distribution. Focusing on life expectancy as a summary measure of mortality conditions, we find that the variance of regional life expectancy increased sharply in 2021. This was due to a much higher-than-average excess mortality in regions with lower pre-pandemic life expectancy. While the life expectancy inequality has returned to its pre-pandemic level in 2022, the observed life expectancy in almost all regions is far below that expected without the pandemic.