Evaluating Latvia's Active Labour Market Policies
This report on Latvia is the fifth country study published in a series of reports looking into how policies connect people with jobs. It focuses on Latvia's long-term unemployed and those at risk of long-term unemployment. The report analyses linked administrative microdata to evaluate quantitatively the impact of activation policies elaborated in Latvia’s Inclusive Employment Strategy 2015-2020. More specifically, it assesses the effectiveness of training measures, employment subsidies and a programme promoting regional mobility. This report derives policy lessons from the empirical results to help the Latvian authorities adjust the activation strategies and measures in order to strengthen labour market participation of the unemployed and improve their labour market outcomes, helping them move into more productive and better quality jobs.
Also available in: Latvian
Executive summary
This review discusses the evolution and performance of active labour market policies in Latvia since 2012, as the Latvian labour market emerged from the particularly severe effects of the global financial crisis. In the immediate aftermath of the crisis, Latvia experienced one of the largest increases in the unemployment rate – 15 percentage points – of any OECD country and Latvian workers experienced a drop in both real and nominal wages. Yet the recovery from the crisis was relatively strong and rapid, and Latvia’s unemployment rate halved between 2010 and 2015. Nevertheless, in 2018, the unemployment rate was still at 8%, close to pre-crisis levels in Latvia, but above the OECD average. Moreover, long-term unemployment has remained a challenge in Latvia: in 2017, just seven other OECD countries had a higher proportion of the labour force unemployed for 12 months or more.