Poverty and public works: Evidence from Hungary

This paper investigates how being employed in public works exposes workers and their households to poverty. Public works consist of centrally planned and financed works targeting long-term unemployed or inactive. Evidence is primarily negative concerning improved employment trajectories, while we still know little about the poverty outcomes. To examine this, we draw on the 2014–2019 cross-sectional data of the EU-SILC survey for Hungary. Hungary has invested significantly in these programmes over the last few years, and since 2014, it has provided a unique opportunity to access income and public works information within EU-SILC. Results highlight the relevance of both quantity and quality of employment. Public workers are better off than long-term unemployed. However, they show higher poverty risk than non-public workers (about twice as much). Living with non-public workers substantially reduces their poverty risk, while households of only public workers struggle more to avoid poverty.