Hungary Shoots Itself in the Foot

Eastman Johnson: Reading Boy // Public domain

In the first half of 2023, almost weekly protests were held over the education system in Budapest, Hungary. In some cases they were organized by teachers’ unions, in others they were planned by students. Based on the study done by the Republikon Institute, 62% of the Hungarian population rate the education system as “bad” (Republikon, 2023).

The question of why this overwhelming discontent cannot formulate into political action is a worthwhile study. However, in this essay I want to see the bigger picture and argue that current policymakers are shooting the country in the foot by failing to implement necessary educational reforms.

With the current demographic trends only an increase in labour productivity can save the crumbling pension system (Partizán, 2023). I will start with a brief overview of the educational reforms from 2010, when the current ruling party, Fidesz, came into power. I will then turn to the current state of the education system highlighting its problems and arguing that with the contemporary trends it will lead to a disaster.

After more than 20 years of liberal decentralised education, in 2011, the new conservative majority in the Parliament enacted two new laws regarding public and vocational education (Mészáros, 2013; Radó, 2021). In the new centralised structure, all the schools were merged into the Klebelsberg School Maintaining Authority (KLIK). The autonomy of schools was diminished, principals were appointed not by the faculty, but by the ministry. Vocational education was, after many changes, moved under the Ministry of Innovation and Technology. A New National Core Curriculum was also introduced and the purchase from private textbook companies was banned and only the government issued textbooks were allowed (Radó, 2021).

Such centralized control was achieved that today teachers have to ask permission from the KLIK regional office to buy chalk and other necessary school supplies. Education has since been transferred to the Interior Ministry, now under former police officer Sándor Pintér. However, the new centralised system did solve the problems.

Today the Hungarian education system does not prepare its students for the future. It is stuck in the past with its Prussian roots. A lot of emphasis is placed on memorizing large amounts of information, while little to no attention is paid to improving skills such as cooperation, language learning,  and problem solving. This is also illustrated with the declining test scores at the PISA tests (Statista, 2018). Furthermore, the education system reinforces already existing socio-economic inequalities. 12% of students leave secondary education without a school-leaving certificate.

Moreover, in every year, only 1% of students accepted into higher education come from lower-income families (Partizán, 2023). The higher education institutions were owned by the state, but in 2021, they were handed over to foundations with boards of trustees led by Fidesz party members for fees averaging 2500 euros a month (Kozák, 2022). According to the Central Office for Statistics, the average net wage per month in Hungary is 1050 euros (2023). This led to a backlash with the European Union and almost all Hungarian universities were excluded from the Erasmus program (Sz., 2023). This issue was only resolved when the party members in question resigned from their posts. Next to the biased privatisation of higher education, Fidesz also creates alternative educational institutions to further their political goals.

Founded in 1996, the Matthias Corvinus Collegium (MCC) aims to act as a talent enrichment centre but, in reality, at least since 2020, disperses the worldview of Fidesz. It offers programs for gifted students from primary school until post-graduate level. Apart from a MOOC in which students can learn topics, among others, like literature, history, or economics, there are weekly events where students can learn more about contemporary issues and be part of a larger community.

While this initiation would seem good at first, one has the recognise that MMC is a private institute. There is no democratic oversight, and it acts as way to promote the worldview of Fidesz. The speakers at the said weekly events are always in support of the government’s stance on the issue in question. This is no surprise because the chair of the board of trustees at MCC is Balázs Orbán (no familial relation to PM Viktor Orbán), who is currently the Political Director of the Prime Minister and a member of the National Assembly of Hungary.

Furthermore, MCC uses its scholarships to whitewash the policies of Fidesz in the international media. With an international fellow reporting in an opinion piece published in The Guardian that MCC strongly encourages their fellows to write good things about the policies of the Hungarian government (Szechenyi, 2023).

But it also acts as an informal way for the government to pursue its international interests, like how MCC bought a private university in Austria and an office in Brussels or how its annual festival (MCC Feszt) attracts speakers like Tucker Carlson who, according to a statement from MCC, participated in the event for free. They did not even cover his travel expenses (, 2023), which is curious because the one thing that one cannot say about MCC is that it lacks money.

After 2020, it got around 1.4 billion euros in government funding (Hopkins, 2021). MCC currently holds 10-10% of the shares in 2 of the largest Hungarian corporations, namely in MOL Group (Hungarian Oil and Gas Public Limited Company) and in the pharmaceutical company Richter Gedeon Plc., getting dividends worth around 72 million euros in 2022. Thus, it is on the road to become the largest real estate developer in the country (Weiler, 2023).

Therefore, there is a clear trend toward the privatization of higher education institutions and the development and over-funding of alternative institutions. However, the disturbing development of education becomes frightening when we look at the demographic reality.

The total fertility rate (TFR) has been on a downward trend in Europe for decades. The highest is in France at 1.84, the Czech Republic at 1.83, Romania at 1.81, and Hungary at 1.56 in 2021 (European Commission, 2023). Today, Hungary has a slightly larger TFR than the EU which stands at 1.53. Éva Berde and Áron Drabancz, in a study released in 2022, argue that the Hungarian government is spending a significant amount of its GDP for family support to achieve the desired TFR of 2.1, which would only mean that the population reproduces itself but does not grow.

However, even this huge amount of spending does not achieve the desired goal (2022). At the same time, in the last 30 years, life expectancy rose from 69,41 in 1993 to 77,31 in 2023 (, 2023). The two trends combined lead to the aging of the Hungarian population. The latest census statistics show that 21% of the population is made up of people over the age of 65, up from less than 20.5% in 2021, and some analyses predict the percentage will reach 33% by 2060 (Farkas, 2023). This means that as time goes on, fewer and fewer people will have to support the pensions of more and more people. At the same time, more and more young people are leaving the country to study abroad.

Engame Academy, a consulting company that helps students to prepare their application to foreign universities, predicts that in the academic year of 2021-22 around 16000 Hungarian students attended foreign universities (Madzin, 2023). Since Brexit, the most popular destination has been the Netherlands due to the large number of undergraduate courses taught in English. This number is only going to get bigger. Even today, there are several elite high schools, mostly in the capital, more than half of which students go to foreign universities (Szabó, 2022).

This trend shows that the smartest students who have the financial means are choosing to go abroad. While there are no statistics on the question of how many students are coming back, one can presume that at least some of them will live abroad. So, there is a two-fold problem. On the one hand, the population is getting older so less people will need to sustain the pension system. On the other hand, more and more smart young people are leaving the country (aka brain drain). I argue that both problems can be alleviated through education reform. At least some students choose foreign universities because of international rankings. The issue of an aging population can only be solved by increasing productivity. Higher productivity and education go hand in hand.

Mainstream economics lists 3 different factors in which education affects economic growth. Firstly, economics increase human capital, and thus achieving higher levels of labor productivity. Secondly, it can increase the innovative capacity of an economy. Finally, it helps disseminate information about new technologies so that they can be implemented more easily, thereby achieving higher levels of productivity.

However, it is important to emphasise that not all schooling is the same (Hanushek et al., 2008). At first, researchers focused on the number of years spent at school. However, according to available empirical evidence, this is not a good approach. There is some correlation between economic growth and years in education, but it is not convincing.

Hanushek et al. (2008) extends the analysis to not just the quantity of schooling, but to its quality. They do this by comparing international test scores with available economic growth data between 1960 and 2000. Their research found that the quality of education is one of the main predictors of economic growth across different development levels. Increase in human capital can have wide ranging effects, like create more inclusive institutions. Inclusive institutions, according to Acemoglu et al., is another key component to economic growth (2013). Considering this research, it is more worrying that the PISA scores achieved by Hungary have been declining for decades.

In this article I tried to highlight some of the problems of the education system and putting it into the context of the wider demographic decline happening not just in Hungary, but also across the western world. Hanushek et al.’s research highlight how important is the quality of the education.

Viktor Orbán’s government, in all its efforts to combat depopulation and ensure economic longevity, fails to recognise that by letting the education system collapse they’re contributing to the problem in a major way. A comprehensive reform of the primary and secondary school system could mitigate the issue. However, I would argue that a qualitative increase in higher education could reverse the trend Hungary’s brain drain. The data is clear, and the clock is ticking. It is time that the policymakers wake up and do their jobs.


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Continue exploring:

Orbán vs. Pressman: Insights into Current US-Hungary Relations

Hungarian Education System, 12 Years Later: From Government Change to University Protests, Teacher Strikes

Efraim Toth
Republikon Institute