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The report says that income inequality reduced slightly since the crisis, which was mostly due to reductions in the wealthier households' incomes, as well as efficient welfare system and higher pensions, writes LETA.

The report says that the effect of the security system on poverty in 2010 was the greatest since 2004. 19% of residents were exposed to the risk of poverty in 2010, but the figure would have been 46% if not for various welfare benefits, pensions and other social aid, the Welfare Ministry informs.

Although the social welfare system has made it possible for thousands of people to survive the crisis, the severity of the crisis and the constantly high unemployment had a profound effect on the quality of life in Latvia. The report notes that the depth of poverty continues to increase in the wake of the crisis, and that residents' material situation continues to decline, mostly due to increasing consumer prices.

"The social security system has proven its efficiency both during the crisis and the post-crisis periods, ensuring income for a majority of Latvia's residents," said the Welfare Ministry's State Secretary Ieva Jaunzeme. "At the moment, the ministry's priority is to find ways to help those who have been affected by the crisis to return to the labor market and be able to provide for themselves and their families."