L abour Market in Latvia (institutions and policies)

1. Labour Market in Latvia(institutions and policies) Ministry of Welfareof Latvia Riga, 10/03/2008

2. Institutional Framework • The Parliament (Saeima): • The Committee of Social and Labour Affairs • The Subcommittee for Employment (established in 2006) • The Cabinet of Ministers: • National Tripartite Cooperation Council (7 subcouncils: Labour, Vocational Education and Employment, Social Insurance, Health, Transport, Environment, Regional Development) • The Ministry of Welfare: • Key areas - social assistance, social insurance, labor, gender equality  • Key documents - the Regulations of the Ministry of Welfare, the Declaration of the Cabinet of Ministers, the Ministry strategy 2008-2010, policy planning documents developed by the Ministry

3. Institutional Framework for HRD and Employment

4. Labour market priorities according to Latvia's National Lisbon Programme 2005-2008 • Promotion of Active labour market measures (ALMM) for the unemployed(provision of training and continuing training to unemployed, provision of work practice placements for young unemployed, raising competitiveness of unemployed and job seekers etc.) • Promotion of economic activities in less developed regions • To struggle more actively with undeclared work and stimulate employees take part in formal economy • Expand education un training activities - raising of qualification and provision of new skills

5. Responsibility of the Ministry of Welfare • Support to unemployed and job-seekers (ALMM) • Career consultations • Training of employed persons (planned) • Labour relations and social dialogue • Undeclared work • Health and safety at work • Access of foreigners to Latvian labour market • Minimum wage

6. Institutions • STATE EMPLOYMENT AGENCY Function: state policy implementation for reducing unemployment and supporting unemployed, job seekers and persons under risk of loosing job, career guidance and consultations • STATE LABOUR INSPECTORATE Function: supervision of implementation of labour relations and labour protection legislation • STATE SOCIAL INSURANCE AGENCY • STATE AGENCY SOCIAL INTEGRATION CENTRE

7. Main Labour Market Indicators, Eurostat, % * National statistic bureau, data in 4th quarter 2007

8. Main problems in the labour market • Demographic situation and ageing • Qualifications and skills of labour force mismatch labour market demand • Low participation rate in lifelong learning • Lack of labour force in several sectors • Economically inactive groups • Lack of infrastructure for business activity in regions and promotion of workforce mobility • Low wages • Undeclared work • Unsatisfactory working conditions and quite high amount of accidents in workplaces • Lack of opportunities to combine work and family life

9. Latest developments • Changes in legislation in June 2007: • Focus of ALMM on new target groups - inactive persons, persons who take care of family members, drug / alcohol addicts • Raising of qualification and competitiveness - training for employees and self-employed • Promotion of regional mobility - preventive measure supporting employees • More targeted career guidance and job placement - merging State Employment Agency and Professional Career Counselling State Agency from 01.09.2007. • Establishment of National Coordination Council on Career Guidance Development (according to White Paper on March 2006) • Migration Concept in the context of Employment under discussion (prepared by the Ministry of Interior, but not yet adopted by the Cabinet of Ministers) • Labour Market Forecasting Council established in the Ministry of Economics in 14.01.2008. • Debates in National Tripartite Cooperation Council on changes in Labour Law concerning flexicurity (1st Quarter 2008)

10. ESF priorities 2004 –2006:Promotion of Employment and Combating Social Exclusion • Promotion of re-training and raising qualification of employed • Provision of training for entrepreneurs and start-ups • Development of entrepreneurship and self-employment, including ICT support for disabled persons • Promotion of active labour market measures for the unemployed (provision of training and continuing training to unemployed, provision of work practice placements for young unemployed, raising competitiveness of unemployed and job seekers) • Provision of training for people facing social exclusion risk, including ICT support for disabled persons • Provision of subsidised employment • Capacity building of the institutions responsible for development and implementation of labour market and gender equality policies • Labour market studies

11. Support of EU structural funds for employment and social inclusion 2007-2013, MEUR Total: 194,2 MEUR, inter alia: • 0,7% from total available ERDF funding • 32,7% from total available ESF funding

12. Funding of EU stuctural funds for employment and social inclusion 2007 - 2013: 194,2 MEUR ESF (91%)177,6 MEUR ERDF (9%) 16,6 MEUR 8% Development of services 83% Support of persons 51% 49% • - Strengthening of institutional capacity •  6,4 MEUR • - Development of evaluation system of operational capability •  1,7 MEUR • Promoting of gender equality •  1,1 MEUR • Innovations •  4 MEUR • Forecasting and monitoring of labour market • 2,4 MEUR Unemployed, job seekers, social risk groups Employees, self-employed • Vocational training •  45,8 MEUR • - Business start-ups •  28,8 MEUR • - Consultations about Labour law and labour protection •  8,4 MEUR • - Active labour market measures •  28 MEUR • Social rehabilitation •  18,5 MEUR • Subsidized employment • 3,6 MEUR • Complex support projects •  18,4 MEUR • Local employment plans •  10,4 MEUR 9% Development of infrastructure • Development of evaluation system of operational capability  4,3 MEUR • Infrastructure development of labour market institutions4,7 MEUR • Institutions of social services • 7,6 MEUR

13. Labour Market Studies of the Ministry of Welfare • Objectives: • To promote employment and social policy in the context of the long-term development of the state and regions • To develop the labour market policy in line with the National Lisbon Reform Programme • To develop analytical basis for effective decision-making • To develop policy alternatives • To start new initiatives • Results and sustainability: • Elaborated the statistical models and innovative dynamic optimization model for labour market forecasting (for the Ministry of Economics) • Developed labour market initiatives for groups of social risk and exclusion etc.

14. Labour Market Studies 2005-2008 1. Study of the labour force and the labour market in sectors of national economy 2. Occupational mobility of the labour force 3. Professional activities of graduates of higher and vocational education institutions after graduation 4. Compliance of higher and vocational education programmes with the requirements of labour market 5. Long-term forecasting system of the labour market and analysis of improvement options 6. The geographic mobility of the labour force 7. Wages and impacting factors 8. Specific problems of the labour market in Latvia and its regions 9. Optimal and employment-stimulating tax and benefit system 10. Gender equality aspects in the labour market 11. Working conditions and risks in Latvia 12. Causes and duration of unemployment and social exclusion 13. Evaluation of unregistered employment

15. Thank You for Your Attention!