The Country Monograph

on Vocational Education and Training Systems and Structures and Public and Private Employment Services in

 

Latvia

Second draft, May, 2003


 

Authors

 

Mr Helmut Zelloth – country manager of Latvia, Estonia, Poland, European Training Foundation;

Mr Jerzy Wisniewsky – country manager of Latvia and Malta, European Training Foundation;

Mr Bertil Oskarsson – international expert, Sweden;

 

Ms Solvita Siliòa – expert of Latvian National Observatory;

Ms Baiba Ramiòa – director of Latvian National Observatory;

 

Ms Inta Paeglîte – national expert on financing and CVT;

Ms Inese Cvetkova – national expert on VET and social dialogue;

Ms Ilze Trapenciere – national expert on equal opportunities and labour market

 

Table of contents

Authors. 2

List of acronyms. 3

Table of contents. 4

1. A brief overview.. 24

2.Vocational education and training in the context of the employment policy. 31

3. Capacity of public (PES) and private (PRES) employment services to support the aims of the national employment policies. 84

4.Conclusions. 106

Bibliography. 111

Annexes

 

 

 

 


List of acronyms

 

CoM – Cabinet of Ministers

CSB – Central Statistical Bureau

CVT – continuing vocational training

GDP – Gross domestic product

EC – European Commission

ESF – European Social Fund

EU – the European Union

HE – higher education

IVET – initial vocational education and training

LAEA – Latvian Adult Education Association

LFS – labour force survey

LLL – life long learning

LVL – Latvian currency lats[1]

MIE – measures of increasing employability

MoA – Ministry of Agriculture

MoC – Ministry of Culture

MoE  – Ministry of Economics

MoES – Ministry of Education and Science

MoF – Ministry of Finance

MoH – Ministry of Health

MoW – Ministry of Welfare

NDP – National Development Plan

NEP – National Employment Plan

NRCVG – National Resource Centre for Vocational Guidance

NTS – National Tripartite Sub-council for Cooperation in VET and Employment

PEC - Professional Education Centre

PES – public employment services

PCCC – Professional Career Counselling Centre

PPS – purchasing power standard

PRES – private employment services

PTCW – paid temporary community works

SES – State Employment Service

SME – small and medium enterprises

VET – vocational education and training

VTCED - Vocational Training and Continuing Education Department

 

 


1. A brief overview

 

The employment policy started in Latvia in 1992 when law “On employment” was adopted and firstly the passive and active employment measures were set.

 

Latvia in the Treaty of Europe signed in Luxembourg in 1995 has made the commitment to respect the EU requirements in the area of employment. The main documents setting the objectives and priorities of employment policy are:

 

The Concept “On Promotion of Employment” adopted by CoM in April, 1999. Three main targets are set in this concept:

·        To establish the system for developing the NEP; MoE was nominated as the responsible for the NEP;

·        To establish system for cooperation of state institutions, local governments, employers and trade unions in solving employment problems; the of the National Tripartite Sub-council (NTS) for Cooperation in Vocational Education and Employment was founded to reach this target;

·        To establish the system of the financing of NEP measures – the financing of NEP measures is carried out through budget programmes of the responsible ministries.

 

National Employment Plans

 

The first NEP of Latvia was developed in 2000 and it included 36 activities aimed at promotion of employment.

 

The NEP of 2001 was accepted by the CoM on February 6, 2001 and included already 43 activities. The financing of activities has increased by 9% in comparison with NEP 2000.

 

The NEP of 2002 was accepted by the CoM on September 3, 2002. It includes 86 activities. The financing has increased by 4% in comparison with NEP 2001.

NEP 2002 respects goals of the employment policy for the year 2005 and 2010 put forward in the Lisbon and Stockholm EU summits and also the EU Council employment guidelines for 2002.

The EU Council in Stockholm, supporting the goals for 2010 identified in Lisbon (employment rate 70%, including that of women – 60%), offered to introduce interim tasks for 2005: total employment rate– 67%, including that of women – 57%; 50% employment rate should be reached by persons aged 55-64 by the year 2010.

 

86 employment promotion activities of NEP 2002 are grouped into four activity areas:

-         perfection of labour capacity,

-         development of business activity and creation of jobs,

-         promotion of adaptation capacity of enterprises and employees,

-         implementation of equal opportunity policy.

 


Key tasks in the area of perfection of labour capacity:

-         SES in co-operation with other institutions (educational establishments, local governments, etc.) and employers within the scope of the allocated budget resources plans: to train and retrain at least 4 thousand unemployed during the year; to involve 18 thousand unemployed in the activities of job seekers’ clubs, to employ in temporary paid public works in the average 4 thousand unemployed per month. However, due to the reduction of financing by 57% (excluding stipends) the number of unemployed persons involved in training and retraining will be by 55% less than in 2001;

 

-         bigger emphasis is laid on involvement of young-aged unemployed in active employment measures, especially, during the first 6 months of unemployment and  prevention of long-term unemployment. For this purpose, implementation of the pilot project “Practice of young aged unemployed with the employer” will be continued involving at least 200 young unemployed;

 

-         it is planned to extend the scope of active employment measures through implementation of pilot projects for improvement of competitiveness of the unemployed in the labour market. The pilot project “Social enterprises to employ less competitive unemployed” initially will allow to create 100 jobs employing long-term and pre-pension age unemployed and in future years allowing to substantially increase the number of such jobs. A new project “Subsidised jobs for pre-pension age unemployed” foresees creation of 200 new jobs by the end of the year. Implementation of the project “Subsidised jobs for the disabled unemployed” will be continued.

 

In the area of promoting business activity bigger attention will be devoted to elimination of obstacles and promotion of start of the business activity. Further perfection of services for taxpayers is planned alongside with enforcement of unified tax legislation, using electronic means of communication, creation of centralised telephone lines to inform taxpayers. The plan of perfection of business environment will be improved, specified and supplemented.

Within the framework of the National Program for Small and Medium Sized Enterprises for 2002-2006 it is planned to achieve in the coming years an essential growth of the number of business starters, recently founded enterprises and growing businesses (in the average by 250 enterprises each year).

Proposals to reorganise business support funds will be developed. In the second phase of implementation of SME crediting program (Latvian Mortgage and Land Bank) it is planned to issue loans for the amount of 7.5 million LVL, which is two times more than in the preceding year, thus potentially creating 440 new jobs.

Measures aimed at promoting creation of new jobs in rural areas will be carried out. For this purpose it is planned to implement support measures of the sub-program on “Diversification of rural economy, promoting alternative revenue sources” within the framework of SAPARD Latvian Agriculture and Rural Development Program, etc.

On the regional level it is planned to work out concrete SES and regional (urban) local governments’ employment promotion plans, as well as implementation of projects within the PHARE 2000 National Program for Economic and Social Cohesion.

 

 

In the area of promoting adaptation capacities of enterprises and employees it is planned to continue tripartite and bipartite co-operation between social partners supported also by the EU PHARE projects “Promotion of Bipartite Social Dialogue in Latvia” and “Improvement of Work Environment in Private and Privatised Enterprises”.

Confederation of Employers of Latvia and Latvian Free Trade Union Confederation will carry out activities to harmonise industrial relations with the new Labour Law, to optimise individual work contacts and collective agreements, to motivate employers to invest in retraining of employees and increase of labour quality.

 

 

In the area of equal opportunities it is planned to implement activities aimed at ensuring equal opportunities for both men and women in the labour market:

  • supporting availability of data about genders and unemployment and implementation of active employment measures;
  • involving the unemployed in active employment measures paying attention to the share of men and women in the total number of unemployed;
  • reducing gender differences related to employment and revenues from work;
  • starting implementation of a new pilot project “Integration in the Labour Market of Unemployed Beneficiaries of the Child Care Benefits”.

 

In should be stressed that NEP are developed for one year, however, the middle term employment strategy is missing in Latvia.

 

National Development Plan (NDP) was accepted by the Cabinet of Ministers on December 12, 2001.

It foresees under the priority – Development of human resources and promotion of employability – the following activities:

-         To increase the quality of labour force according to labour market demands;

-         To implement active labour market polity to promote employability;

-         To develop social infrastructure and services.

 

The Parliament adopted on 9 May 2002 the law “On Assistance to Unemployed Persons and Job-Seekers” (this law came into force on 1 July 2002) replacing the law “On Employment” of 1991. The law says that state policy in reduction of unemployment and in assistance to unemployed persons and jobseekers is implemented by the State Employment Agency (SEA), what is under the supervision of the MoW. SEA is responsible for registration of unemployed and vacancies, for active labour market programmes including vocational training, retraining and upgrading of qualifications, temporary public works, activities on promotion of competitiveness and activities for disadvantaged groups, as well as for licensing and supervision of legal bodies dealing with employment services. By this law the term ‘job-seeker’ is firstly introduced in Latvian legislation.

 

The draft of Single Programming Document for 2004 – 2006 adopted by the CoM on March 18, 2003 foresees the following measures for the priority - Development of human resources and promotion of employment:

-         The promotion of employment (43% of total priority financing are allocated to this measure).

-         The development of education and continuing training (38%);

-         Combating social exclusion (19%);

 

The following indicators are foreseen for the results:

·        Decrease of unemployment rate by 1 percentage point (indicator for 2001 is 13.1%, Source of information: CSB)

·        Decreased share of long-term unemployed out of total number of jobseekers by 2 percentage points (Indicator for 2001 is 55.6%; Source of information: CSB)

·        Growth of share of professional education programmes and corresponding competence based examination standards by 18 percentage points (the amount for 2002 is 12%: Source of information: MoES)

 

In accordance with the provisions of the Accession Partnership, the Government of Latvia has signed on February 6, 2003, with the European Commission, Directorate General for Employment and Social Affairs, a Joint Assessment of Latvia's employment and labour market policy priorities.  This document presents an agreed set of employment and labour market objectives necessary to advance the country’s labour market transformation, to make progress in adapting the employment system so as to be able to implement the Employment Strategy and to prepare it for accession to the European Union. 

 

 

According to the Population Census 2000, the population of Latvia was 2377.4 thousand people or 10.8% less than in the Population Census 1989[2]. The reduction of population is the result of migration and negative natural growth. The ageing of population will reflect to the labour market after some 10 years. At the moment the increase of pensioning age stimulates that the number of people in the working age does not reduce rapidly[3].

 

GDP has increased since 1995, but GDP per capita according to purchasing power standards was only 33% of EU average in 2001.


Picture 1

GDP – 1995 = 100%; estimation for 2002.

Sources: CSB data, Economic Development of Latvia – Riga: MoE, December 2002

 

The registered unemployment rate has not considerably changed during the last years. It was 7.6% at the end of 2002. It went up in 1999 due to the economic crisis in Russia.

There is an evident difference between the registered unemployment rate and the unemployment rate calculated from the LFSs. The main reason can be that people are interested to register only while they can get unemployment benefit.

 

Almost the half (41.8%) of all registered unemployed in 2001[4] had secondary vocational education; 27.8% had secondary general education, 21.3% had basic education, and only 7.1% had higher education. It means that the great part of unemployed have out of date vocational skills and they need retraining or just confidence in their ability to improve their lives doing something else.

 

The share of registered unemployed by ethnicity does not differ a lot from the share of population by ethnicity.


 

Table 7: Share of population and unemployed by ethnicity in 2001(%).

 

Total population

Registered unemployed

Latvians

57.9

51.1

Russians

29.4

35.2

Belarussians

4.0

4.7

Ukrainians

2.7

2.9

Poles

2.5

2.9

Lithuanians

1.4

1.4

Jews

0.4

0.1

Other

1.7

1.7

Source: Statistical Yearbook of Latvia, 2002 – Riga: CSB, 2002.

 

Employment rate in Latvia is lagging behind the EU average. It must be pointed that the women employment rate in Latvia is almost equal to EU average, but men are employed to a much lesser degree. Moreover, there is a tendency of female employment to grow and male employment to decline which is mainly linked with changes of sector structure, where sectors traditionally employing more women develop more rapidly (for example, trade, restaurants and other services).

 

Table 8: Employment rate (employed persons aged 15-64 as a share of the total population of the same age group) 2000, 2001.

 

Latvia 2000

EU 2000

Latvia 2001

EU 2001

Total

57.8

63.4

58.7

64.1

Females

53.9

54.1

55.0

55.7

Males

61.9

72.8

61.9

73.1

Source: http://europa.eu.int/comm/eurostat/html

 

Employment rate differs from region to region. The highest employment is in Riga region, Vidzeme and Zemgale (from 60 till 62%) and lower in Kurzeme (57%) and Latgale (49%). At the end of 2001 this situation changed a little because of the small rise of employment in Latgale, linked with increase of economic activities in Daugavpils and Rçzekne.

 

The structural changes in economy reflect in the structural changes of employed. The proportion of employed in private sector is growing due to privatisation and other private initiatives.

 

Table 9: Proportion of employment in the public and private sectors %, 1992- 2001.

 

1992

1995

1996

1997

1998

1999

2000

2001

Public

59

40

37

34

32

30

29

28

Private

41

60

63

66

68

70

71

72

Sources: Statistical Yearbook of Latvia 2001 – Riga, CSB, 2001 and Macroeconomics of Latvia in figures – Riga: CSB, 2002

 

The structural changes reflect also in share of employed by kind of activity.


 

Table 10: Share of employed persons by kind of activity, %.

 

1996

1998

2000

2001

Agriculture and fishing

17

19

14

15

Industry and construction

27

27

26

23

Services

56

54

60

62

Source: Statistical Yearbook of Latvia, 2002 – Riga, CSB, 2002

 

It seems that employed in agriculture will continue to decrease as only 4% were employed in these sectors in EU in 1999, but in services increase (65% in EU in 1999).

 

The main challenge of the Latvian labour market policy is to react to the changes in economy and to foresee the fields and activities in which labour force will be needed. The educational system may help in this fast changing situation by preparing people with well developed basic skills and self – motivation who are ready (and have possibilities) to learn life long and to change their career according to the structural changes in economy.


 

 



[1] The annual average exchange rate of LVL per EURO is 1999 = 0.625; 2000 = 0.560; 2001 = 0.563; 2002 = 0.583 (data of CSB)

[2] See – Annex: Table 1

[3] See – Annex Table 6

[4] Source: Statistical Yearbook of Latvia 2002 – Riga, CSB, 2002.