Unemployment in Latvia

Topic description and relevance The topic of this course paper deals with the global situation of Latvia employment and how to deal with the unemployment on the labor market. The today’s economic situation in Latvia suffers from unemployment and a lot of people do not have good living standards. The 2008-2009 economic crisis Is responsible of this increasing unemployment. In effect, unemployment was 9% In 2003 – 2005; however, In 2009 It rose to 23% which Is the highest In the European Union.

Research problem During this course paper we will try to answer several questions concerning the answer is how Latvia can deal with its unemployment problem in the actual crisis situation? Course paper aim and tasks The aim of this course paper is to observe and understand Latvia economy and then to compare it to other economies as the France one. Finally, try to find issues for this unemployment, and show on which ways Latvia could centre its economy in order to improve the actual global situation and solve the unemployment problem.

However, the management techniques, the technologies and the production goods were obsolete and Latvia had to face great changes: the economy was turning into a market economy. Unemployment, decreasing output, hard situation characterized the “after domination” period. According to the ONIONS, in 1997, Latvia was places 92 in the people’s development index. What’s more, at the end of the ass’s, the demographic indicators show positive changes, concerning the number of death (-20%), murders decreased by 21% and infants’ mortality by 24%.

However, Latvia population is decreasing years by years since 1994. Finally, even if education seemed being in a positive tendency (number of students increased of 2. 1 from 1991 to 1998), the Ministry of Education and Science noticed that there are still a huge percentage of academic failure and skilled professors in higher education are missing. (According to l. Coursework, head of Division, Ministry of Economy of the Republic of Latvia – 1998) Current situation in Latvia Unemployment in Latvia has soared from 2008 to 2009 and increased from 6. % in July 2008 to 17. 2% in June 2009. Also, there has been an increase in participation in Lamps, concerning mostly very short term measures, called “measures to raise competitiveness”. See on Figure 1). However, the resources available to the State Employment Agency (SEA) have been hit because of the government budget crisis. (See in Figure 2) Figure 2 : Latvia State Budget There are four main challenges in Latvia today concerning employment policies.

First of all, the current level of registered unemployment is 130,000 but apparently jobsharers are more than 190,000 (according to LBS.). These numbers can be expected to both grow and persist since unemployment is a lagging indicator and the economy is not expected to resume growth until 2011. Secondly, unemployment benefit entitlement ceases after 9 months. Since registered unemployment has surged from the end of 2008, very large numbers of unemployed will be coming off unemployment benefit from the autumn of 2009.

Thirdly, to ensure the provision of high quality training that matches labor market needs both in the current situation and that will meet future needs. The current system is provider driven and is dominated by incumbent providers offering rather traditional training programs. Finally, there is the motivation of the unemployed. There is evidence that people may not put enough effort into studies and Job search, especially while they continue to receive unemployment benefit.