Is the aid scheme for disabled workers efficient?

Gyula Pulay

Public Finance Quarterly, 2010, vol. 55, issue 2, 278-297

Abstract: In 2008, HUF 631 billion were allocated in the Hungarian state budget for the disability pension of the working-age population, HUF 94 billion were made available to finance the social benefits of people with health impairments. The two figures added together make up 2.9 per cent of the GDP. If the approximately 700 thousand people who were absent from active production due to disabilities and health impairments had been effectively employed, and if they had been able to contribute to production only with a 50 per cent efficiency compared to the remaining 3.7 million people employed, their contribution could have raised the Hungarian GDP by close to 10 per cent. Understandably, not every person with health impairment is capable of re-entering the labour market, nevertheless, the statistical figures clearly indicate the magnitude of state expenditure and loss of revenues caused by the absence of disabled workers who are the passive beneficiaries of aid schemes. An aid scheme designed for disabled workers may be regarded efficient from socio-economic perspective, if it were to be geared at employment more effectively and proportionately less money were to be allocated for supplementing their income.

Date: 2010
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