Latvia's long-term unemployed need more help, says OECD

Existing employment promotion programs in Latvia need to be improved, with a special emphasis on returning the long-term unemployed to the labor market according to conclusions expressed by experts from the Organization for Economic Cooperation and Development (OECD) at a conference in Rīga April 16.

The OECD experts presented their conclusions based on a study covering a period of five years and using information from the State Social Insurance Agency, the State Employment Agency and the Office of Citizenship and Migration Affairs, as well as data from the municipal social assistance system. The substantial 265-page report can be read below.

 

 

Stefano Scarpetta, head of the OECD Directorate for Employment, Labor and Social Affairs, said that several problems specific to the Latvian labor market were discovered during the study.

"One of them is there are still many unemployed people who have been out of work for a long time, more than one year. 40% of the unemployed are long-term unemployed. They need specific support to try to get back to work. Another problem is that around 4.4% of people of working age have lost hope. They are [technically] looking for a job… but in fact they are not looking for it, although they want to work and are ready to work, because at the same time they believe they will not find a job." said Scarpetta.

OECD researchers have found that there are various shortcomings in existing employment promotion programs with little incentive for small and medium sized businesses to get involved in some programs and too much paperwork in general.

This is also in line with the observations of Latvian businessmen, Anita Līce, representative of the Employers' Confederation of Latvia (LDDK), admitted as much in the discussion saying: "We knew it wasn't working effectively. Overall, the system is good, but the organization needs to be improved. It is clear that the impact of these shortcomings is very much reflected in the unemployed."

Mihails Hazans, professor at the University of Latvia, and an expert in employment and demography said that some of the problems identified in the OECD study were particularly pronounced in some regions of Latvia.

"This situation is worse in all dimensions in Latgale - both long-term unemployment and ordinary unemployment. The latent unemployment in Latgale is also higher," the professor said.

The Ministry of Welfare promises to use the findings of the research to improve existing employment support measures but Minister Ramona Petraviča was keen to accentuate the more positive side of things.

""The OECD assessment clearly and unequivocally shows that labor market policy measures have a significant impact on job opportunities for the unemployed - trained participants in the job market have more job opportunities and higher earnings. The continuation of these measures and the guaranteed increase in the minimum income benefit are the tools by which we can mobilize the workforce,” said Petraviča.

An OECD report released in December 2018 said Latvia "performs better than the OECD average in terms of employment but underperforms in terms of unemployment."

 
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