Analytics, Direct Speech, Employment, Labour-market, Latvia

International Internet Magazine. Baltic States news & analytics Tuesday, 07.07.2020, 15:56

Unemployment in Latvia continues to fall, but "unemployment enclaves" require special structural policy

BC, Riga, 16.05.2013.Print version
Unemployment continues to decrease in Latvia while employment is going up, proving that the Latvian labor market is continuing to recover – however, this is mostly true of Riga and Greater Riga. In regions, the unemployment "enclaves" could be liquidated with the help of special programs fostering employment, tailored for every such region's needs and developed there in line with local specifics – not in Riga, as the Bank of Latvia Olegs Krasnopjorovs opines on the website, cites LETA/

Job seekers constituted 12.8% of the economically-active population at the beginning of this year, which is 3.5%age points less than a year ago and 8.8 percentage points less than three years ago when the crisis was at its peak.


Therefore, the proportion of job seekers is getting closer to the natural unemployment level, which over the past fifteen years has been at 12% to 13% in Latvia, and no noteworthy structural changes have been identified on the labor market during this period, notes Krasnopjorovs.


This means that changes in the unemployment rate will be increasingly more dependent on Latvia's success in the fight against structural unemployment. Should structural policy fail, Latvia may have an average unemployment rate of 12% to 13% for another fifteen years, writes the expert.


The improving "general picture", which shows that employment in Latvia is increasing at one of the fastest paces in the European Union, is basically due to the creation of new jobs in Riga and in the vicinity of major cities. In Latgale, on the other hand, the number of new jobs has not increased in the past twelve months, according to the Central Statistical Bureau's findings.


"For instance, 26% to 29% of economically active residents in Baltinava, Vilani and Zilupe regions are still registered with the State Employment Agency as unemployed," explains Krasnopjorovs, adding that these are the official figures and the actual number may be higher yet.


"There is good reason to believe that unemployment in these enclaves is structural, because there has been high unemployment there already since the 1990s. This mean that the improving employment figures for all of Latvia, achieved mostly by Riga and Greater Riga, will not help these regions, believes Krasnopjorovs.

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