Evaluating Latvia's Active Labour Market Policies

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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.

English Also available in: Latvian

Assessment and recommendations

In the aftermath of the financial crisis, Latvia had experienced one of the largest increases in unemployment – 15 percentage points – among all OECD countries and falling real as well as nominal wages. During a strong recovery, Latvia’s unemployment rate halved between 2010 and 2015. At 8% in 2018, it was close to pre-crisis levels but remains above the OECD average. Latvia’s employment and participation rates have risen beyond pre‑crisis levels and OECD averages, respectively reaching 63% and 78% in 2018. However, most sectors have not fully regained the absolute levels of employment they exhibited before the crisis, substantial numbers of unemployed persons have left the labour force or emigrated from Latvia over the past decade, and high unemployment rates persist in some regions and demographic groups, such as youth and older men.


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