Latvia has undergone major economic and social change since the early 1990s. Despite an exceptionally deep recession following the global financial crisis, impressive economic growth over the past two decades has narrowed income and productivity gaps relative to comparator countries in the OECD. But Latvians report low degrees of life satisfaction, very large numbers of Latvians have left the country, and growth has not been inclusive. A volatile economy and very large income disparities create pressing needs for more effective social and labour-market policies. The government’s reform programme rightly acknowledges inequality as a key challenge. However, without sustained policy efforts and adequate resources, there is a risk that productivity and income growth could remain below potential and social cohesion could be further weakened by high or rising inequality.
Latvia faces a huge demographic challenge. Since restoration of its independence in 1991, the country lost more than a quarter of its resident population.The report "Investing in Youth: Latvia" states that investing in youth, by upgrading skills and promoting employment, is a priority if Latvia wants to offer its young people a positive outlook and address the demographic challenge.
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The economic crisis had deep impacts on the Latvian labour market, but the recovery has been equally remarkable. The employment rate dropped from 70% in Q4 2007 to 57% in Q1 2010, but has since been increasing strongly. The fall in unemployment has been particularly marked among youth.
This report provides a detailed diagnosis of the youth labour market and education system in Latvia from an international comparative perspective, and offers tailored recommendations to help improve school-to-work transitions. It also provides an opportunity for other countries to learn from the innovative measures that Latvia has taken to strengthen the skills of youth and their employment outcomes, notably through the implementation of a Youth Guarantee.
Latvia should step up its efforts to improve the employment prospects of young people by continuing to reform its vocational education system and pursuing the commitments made as part of the Youth Guarantee to further reduce the share of young people under 30 who are not in employment, education or training.
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This rapid policy assessment focused on supporting the unemployed in business creation and self-employment, notably the Measure for Commencing Commercial Activity or Self-employment is organised and promoted by the State Employment Agency.
Today many local communities are confronted with the challenge of reducing high and persistent unemployment and defining new sources of economic growth, all in the context of shrinking public resources. The event gathered representatives of ministries responsible for regional development and employment from Latvia, Lithuania and Estonia and selected OECD countries to exchange on approaches that work in addressing these challenges.
The seminar was targeted at national, regional and local practitioners who dealt with anticipating and managing demographic changes in Russia and Eastern European countries and wanted to interchange experiences and approaches with other experts from OECD countries.
This seminar was part of a three-year programme of cooperation between the European Commission and the OECD LEED Programme to monitor and report on entrepreneurial activity in Europe and related public policies and actions.
This seminar presented and debated the result of work undertaken by the OECD Local Economic and Employment Development (LEED) Programme on how best to support the design, implementation and evaluation of local development strategies in Latvia.