Labour shortage ends Hungary’s population decline as migrant workers offset natural decrease

There were 9,770,000 people living in Hungary at the beginning of this year, the lowest since 1955, so the population continues to decrease. However, the decline has been very slight for the past two years at just 3,000 in 2019 and 5,000 the year before, a marked change from the tens of thousands seen in preceding years.

Natural decline, the difference of births and deaths, has been stable at 35,000 to 40,000 a year for the past 20 years in Hungary. This means that barring other factors, population would have decrease by about 800,000 since 2000.

The fact that is has not done so owes to migration, an area where we have seen two major changes in recent years.

Foreigners, Hungarians coming and going

The difference between natural and actual decline has grown because the effects of migration on population have become remarkable: in 2020, there were 39,000 more immigrations than emigrations, a new record that has been able to nearly completely make up for natural decline.

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But what exactly has changed? Looking at migration patterns, the first step is separating the migration of Hungarians from that of foreign citizens. As the graph below shows, net migration has been positive in both groups in the past three years.

The above data also includes Hungarian citizens born abroad moving to Hungary. These are predominantly dual citizens born outside Hungary, who naturally show a high net surplus. The graph below shows the international migration of Hungarian citizens. Migration of Hungarians born abroad (mostly dual citizens from neighbouring countries) is adding about 10,000 to Hungary’s population each year, while the other two categories, marked by the orange and light blue columns, have evened out by last year as emigration and re-migration of Hungarians born in the country was equal. Portfolio reported on the end of net emigration earlier this year.

As shown above, a change in the migration patterns of Hungarians accounts for part of the stop in population decline, but only for a smaller part: the end of net emigration makes up about a quarter or a third of population decline seen in earlier years. Meanwhile, immigration of foreign citizens more than doubled over the past three years.

Of course, the interesting part here is the net figure: as seen in the graph, net immigration of foreign citizens has grown nearly 200% from the low point in 2013.

Where are they coming from?

In summary, population decline has stopped due to the large number of foreign citizens moving to Hungary. But why has Hungary become so popular? The distribution of immigrants by country of origin confirms what most readers have probably surmised.

As shown in the graph, immigration from Western Europe and the CEE region has remained practically unchanged for the past 10 years, while there was marked increase in the last 3 years from two main areas: Asia and Ukraine. The reason while large numbers of people from these locations have moved to Hungary is not a mystery: they are migrant workers. The labour shortage in Hungary between 2017 and 2019 attracted such masses of foreign workers to the country that it has cancelled out natural population decline.

Migration from Ukraine has been spectacular, with 21,000 immigrants last year compared to just a few hundred a year in the mid-2010s. As we are talking about temporary workers, relocation to Ukraine has also been higher, but the net figure remains positive and is still growing.

Overall, we can say that the reason the annual population decline of about 40,000 arising from natural decrease has shrunk to nearly zero in the past two years because

• the emigration of Hungarians has stopped (or more precisely, the number of those leaving and those returning is now nearly equal),
• immigration for (predominantly short-term) work has grown, particularly from Asia and Ukraine.

Is should be noted that migration is hard to observe and statistics are often based on estimates. Next year’s census could help clear up the picture and correct demographic data.

And what about 2020?

Of course, we have no data for 2020 yet, but is it highly probable Hungary’s population may have decreased more this year than in the preceding two years. This is not due to natural decline, as there were more births and fewer deaths in January-October than a year earlier. Meanwhile, the coronavirus pandemic resulted in more deaths in the last months of the year, so overall natural decline in 2020 will not be much lower than in recent years.

However, immigration has certainly halted in this period of economic troubles, and it is probable that migrant workers have left Hungary in higher numbers. (Construction, one of the industries employing the highest number of foreign workers, has been in recession even without the pandemic.) However, the situation may be improved somewhat by Hungarians returning home from working abroad. This means that the actual population figures this year will be shaped by the resultant of several opposing demographic movements. In the medium term, the key question is whether migration will return to pre-crisis patterns (which depends on a tight labour market), and whether the government’s family policies will produce spectacular results.

Cover photo: Getty Images