Contents (Parts 3-4)

 

 

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

3.1. The organisational structure.

3.2. Resource allocation to the PES.

3.3. Coverage of public employment services

3.4 Range and quality of services.

3.5. Role of private employment services (PRES)

3.6. Reforms of the PES

3.7. Support for implementing the EES.

4.Conclusions

Bibliography


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

3.1. The organisational structure.

 

Legal framework

 

A reform of social security system begun in 1990-1991 in order to create a new model of social security that would guarantee social security and protection for all inhabitants.  The new social security system was aimed to correspond to Latvia’s conditions as well as to the social security standards of Western countries thus facilitating integration of Latvia into EU.  Strategic tasks of this reform were to raise the economic activity of the working age population and to improve economic basis in realisation of social policy. Officially unemployment did not exist during the Soviet times in Latvia so there was no need for public employment services. The situation has changed shortly after getting independence and introduction of the principles of free market economy. Once unemployment had appeared in Latvia the Parliament adopted the Law on Employment (1991). The intention of that legislation was to protect people who loses job.

This law stated that SES is responsible for the implementation of the state employment policy. The status, rights and duties of an unemployed were defined in law. In 1991 the SES was established and first unemployed persons were registered.

 

The basic rights to social protection are defined in the constitutional law "Rights and liabilities of the inhabitants and citizens” which stipulates the rights to financial maintenance at pension age, in case of illness, complete or partial disablement, as well as the rights to receive an unemployment benefit in the case of loosing job. Since the laws have the most important role in insuring the functioning of the social security system, in 1995 a legislative reform was carried out.  Saeima (Parliament) of the Republic of Latvia has adopted 7 new laws which cover all the aspects of the social protection:  “Law on Social security”, “Law on the Social Tax”, “Law on Social Assistance”, “Law on State Pensions”, “Law on Mandatory Social Insurance for the Case of Unemployment”, “Law on Mandatory insurance against work accidents and professional illnesses”, “Law on Insurance for Maternity and Illnesses”.  These laws guarantee social protection to the inhabitants of Latvia, simultaneously enlarging their responsibility and their involvement in insuring of the social security. As well, these laws regulate the financial and organic structure of social insurance. Besides the laws there have been elaborated other legislative documents that regulate application of particular law. Besides, government establishes amount of social benefits and payment procedure.

 

In 1995 also the reform of social insurance started. It was the starting point for individualized accounting of social tax payments – each person has its own insurance account, where its social tax payments are registered. The social tax was introduced in 1991. For administration of social tax and social services The State Social Insurance Foundation was established in 1994, in 1998 it was reorganized in State Social Insurance Agency. In 1998 law “On State Social Insurance” (replacing Law on the Social Tax) came into force. This law states there are 5 kinds of state social insurance - insurance for state pensions; insurance for the case of unemployment; insurance against accidents at work and professional diseases; disability insurance; maternity and sickness insurance. The mandatory social contribution payments form state special insurance budget which consists of 4 special budgets – state pensions special budget, employment special budget; work accidents special budget; disability, maternity and illness special budget (see table 23 in annex).

 

On October 5, 1995 the law “On Mandatory Social Insurance in Case of Unemployment” was adopted (it came in force from January 1, 1997). This law set that a separate part of social tax is allocated to Employment foundation, later special employment budget. The new procedure for calculation of unemployment benefits was established. On November 25, 1999 the new law “On Insurance in the Case of Unemployment” was adopted. This law replaces the previous one and determines that unemployment insurance services are financed from state social insurance special budget. This law states that as of January 1, 2002 the finances of Employment special budget are used for financing of active labour market measures (retraining of unemployed, raising of employability), preventive measures but not more than 10% of annual total amount.

This law sets the system of unemployment benefits as well (see table 24 in annex).

 

The Parliament of Latvia adopted on May 9, 2002 the new law “On Assistance to Unemployed Persons and Job-Seekers” (this law came into force on July 2002)  replacing the law “On Employment” of 1991. As laid down in the new law, SES is the implementing body for state policy in field of unemployment reduction and assistance to unemployed and job-seekers. This is an important shift from ‘protecting unemployed’ to ‘reduction of unemployment and assistance to job-seekers’. The term job-seekers firstly appears in this law[1]. The number of persons who have rights to participate in activities on promotion of employability, to get information about vacancies and to get vocational guidance has increased.

 

As of January 2003 the new Social Assistance and Social Services Law (adopted in 2002) comes into force. It replaces law “On Social Assistance”. This law states that if person is able to work and does not work but wants to receive benefit from local governments for provision of minimum income level should register within SES.

 

Institutional setting and responsibilities

 

According to the law “On Assistance to Unemployed Persons and Job-Seekers” the competence of the CoM is to adopt NEP annually, where the priorities for labour market policy are set, concrete active measures and preventive measures and necessary financing are determined. The MoE coordinates the elaboration of NEP and submits it to the CoM.

 

The MoE holds responsibility for promotion of entrepreneurship and the creation of a business friendly environment, including development of infrastructure.

 

The MoW and its Labour Department is responsible for labour market policy and passive labour market measures. SES works under the supervision of the MoW. The Ministry, and in particular the Labour Department is responsible for the budget of the SES, which it negotiates with the MoF. The MoW thus is the actor that represents SES in the budget process, and it is Labour Department that prepares analysis of the labour market and international projects in the labour market field. MoW is supervising the PCCC and State Social Insurance agency (SSIA).

 

MoES is generally responsible for all levels and types of education and training. It cooperates with SES in organization of vocational training for unemployed and with PCCC in the field of vocational guidance. However, the continuing training is not regulated directly by MoES.  Each line ministry is responsible for their respective field regarding continuing training. E.g. MoA is responsible for CVT in agriculture sector, MoH in health sector, MoES is education sector, State Administration  School for civil servants etc. Some of biggest employers are providing CVT for employees by themselves.

 

According to the law “On Assistance to Unemployed Persons and Job-Seekers” the duties of local governments are

·        according to the NEP carry out local employment plans;

·        to cooperate with SES and PCCC in implementation of active labour market measures

·        to provide all necessary information to SES and PCCC

·        to help involve unemployed in projects financed by local governments or foreign investors.

 

The State Social Insurance agency (SSIA) is responsible for the payment of unemployment benefit since year 1998[2].  This is an insurance-based payment which is based on the individual's previous work history, and is financed from social contributions. It is also a condition of receipt that the individual is registered as unemployed with the SES. Those unemployed who are not entitled to unemployment benefit (or whose benefit entitlement is below a certain level) may apply for social assistance payments. Overall responsibility for social assistance lies with the Social Assistance Fund under the supervision of the MoW, but payments to individual applicants are managed by local government authorities and financed from their general budgets.


 

The organisation of the public employment services and their responsibilities at national, regional and local level

 

The SES has a critical role in people's adjustment to changed circumstances – supporting and encouraging mobility and flexibility, by helping people identify and acquire the skills, attitudes and other attributes that are required in new and developing parts of the economy. It is important therefore that the SES is adequately resourced and follows appropriate strategies in order for it to fulfil this role.

 

In 1999 the SES[3] was reorganised as a state non-profit joint-stock company under the supervision of the MoW. According to the Law on Public Agency (2001) and the Order of the CoM the State Employment Service will be reorganised into the state agency “State Employment Agency” (foreseen for January 2003 but now postponed because of the new Government). This new status will more correspond to the duties of SES as it is a state organization providing services to the public.

 

The SES has a board consisting of the Director of the company and the Deputy Directors. There are also three external persons (one of them is the head of the Free Trade Union Confederation) designated as authorized representatives who have some monitoring function.

 

According to the law “On Assistance to Unemployed Persons and Job-Seekers” the duties of the State Employment Agency (as of it is not established – State Employment Service) are:

  • to participate in elaboration of NEP;
  • to organize and carry out active labour market measures;
  • to assist unemployed and job-seekers to join labour market;
  • to register vacancies;
  • to register unemployed and job-seekers;
  • to inform free of charge about vacancies, as well as about rights and duties of unemployed and job-seekers;
  • to consult free of charge unemployed and job-seekers about professional suitability;
  • to analyse and forecast labour market;
  • to organize cooperation between SES and employers;
  • to organize dialogue between employers and unemployed in order to reduce the rate of unemployment;
  • to cooperate with public and private institutions and legal and human bodies;
  • to confirm labour permits for foreign who want to work in Latvia;
  • to ensure information about unemployment and employment in the country;
  • to licence and monitor legal persons, who deal with recruitment services;
  • to participate in elaboration and implementation of international projects in the field of unemployment reduction and labour force mobility;
  • to carry out other duties foreseen by normative acts.

However, the law is quite general and does not formulate detailed tasks for regional and local branches.

 

At the beginning of 2003 the SES consists of the central office, 28 branches and 34 local co-ordinators.. So, there is the SES branch in every district of Latvia. The registration of unemployed is carried out according to the living place, so the regional SES branches registers unemployed who lives in their administrative territories. The structure of SES is seen in picture 1 in annex.

 

According to the law “On Assistance to Unemployed Persons and Job-Seekers” the Professional Career Counselling Agency (as of it is not established – the Professional Career Counselling Centre) provides vocational guidance services. PCCC is under supervision of MoW. PCCC was established in 1987, at present it has counselling cabinets in 17 regions of Latvia and a mobile counselling group. The functioning of PCCC is financed by the means of special employment budget. The action of the Centre in the sphere of career guidance and counselling was fixed in the Latvia National Employment Plan 2001 and 2002 .The centre’s tasks are:

1)                 delivering of services of guidance and counselling to the population;

2)                 compiling, structuring and providing of the population with information about possibilities of education;

3)                 compiling, structuring and providing of  the population with information about occupations, making descriptions of occupations;

4)                 carrying out scientific methodical work for developing and adapting forms of guidance and counselling work, materials and methods;

5)                 carrying out the research of the items of professional intentions and career planning of the population, mainly of  youths;

6)                 carrying out the training of guidance and counselling specialists;

7)                 fostering of co-operation among the different institutions involved in career guidance

 

The above mentioned legal acts denote that all the inhabitants in the state have got the right to get the services of professional guidance but in fact they are not available in a sufficient volume neither taking into consideration the territorial principle nor the category of clients. The PCCC provides informative, guidance and counselling services to any inhabitant of Latvia - to pupils, students of vocational schools and vocational technical schools, students of higher educational establishments, the unemployed, job-seekers, the employed, pupils’ parents. Certain priority in the work of the PCCC is counselling the unemployed and job-seekers. Nevertheless the limited financing of this institution does not allow to provide the availability of services in the sufficient volume. The total number of the staff there is 53, the total number of the employed counsellors is 37, among them 3 men and 34 women, the average age of the counsellors is 36 years.

 

There is a co-operation between the SES and the PCCC in the items of guidance and counselling of the unemployed and denoting of the professional adequacy – the SES inspectors inform the unemployed about the counselling possibilities or write an appointment for consultations in the PCCC. Nevertheless, the co-ordination among these organisations is not of full value because not all the unemployed who need counselling get appointments to the PCCC. As Analysis of Results of Unemployed Survey carried out in December 1999 by SES proves, the demand for career counselling is 10 times greater than the number of the unemployed having been appointed to the PCCC.

 

The role and involvement of the social partners and other stakeholders

 

Currently, the tripartite social dialogue is well developed in Latvia only at the national level. The National Tripartite Co-operation Council (NTCC) operating within the framework of the MoW is the main forum for tripartite dialogue. In the NTCC, employers are represented by Latvia Employers’ Confederation, whose membership covers 66 enterprises and 14 associations, covering over 30% of the total workforce in Latvia. Workers are represented by the Free Trade Union Confederation of Latvia, which unites trade unions covering approximately 30% of all employed persons. The law participation rate in social partners’ organisations does not affect its possibilities to influence policy on the national level, however, it have negative impact on regional and enterprise level.  The NTCC, in addition to its plenary sessions, operates through a number of sub-councils dealing with specific elements of economic and social policy (for example, on labour affairs, vocational education and training, and social security matters). There are some attempts to  regional sub-councils on VET and employment. The sub-council in Rezekne district now is on preparatory stage and is supported by EU Phare project. Tripartite and bipartite co-operation among social partners will be improved and supported by the implementation of EU Phare projects “Promotion of Bipartite Dialogue in Latvia” and “Improving Business Environment in Private and Privatised Enterprises”.

 

The legal and institutional structure of public employment services has been developed since 1991, setting the direct duties for each organization. SES is responsible for implementation of state employment policy, however it deals only with active labour market measures. SES is more oriented on people out of labour market and is not dealing with preventative measures at all. It should be stated that preventive measures is missing in country. The new law “On Assistance to Unemployed Persons and Job-Seekers” increases the coverage of population who can reach the services of SES, but results of this could be seen only after some time. The new law points an important shift from ‘protecting unemployed’ to ‘reduction of unemployment and assistance to job-seekers’. The tripartite social dialogue is well developed in Latvia only at the national level, nevertheless in the regional and enterprises level it does not work appropriately. However, the involvement of social partners in PES in Latvia still needs improvement.

 

3.2. Resource allocation to the PES.

Financial resources

For the implementation of objectives and tasks of PES three major types of resources are required:

1)      financial;

2)      human;

3)      infrastructure investments.

 

In Latvia expenditures for active and passive labour market activities as well as for the administration of services are financed from the general state budget and special employment budget. The special employment budget is composed from social contribution payments. The resources (in 2000, 2001) of it could be spent for (see also table 21 in annex);

a)      subsidies to inhabitants - unemployment benefits, funeral benefit in case of death of unemployed; stipends (during the retraining courses of unemployed);

b)      grants to enterprises and institutions – vocational training and retraining of unemployed; vocational guidance and counselling; job seekers clubs.

 

As of 2002 the paragraph of law “On Insurance in the Case of Unemployment” came into force stating that finances of special employment budget are used also for active labour market measures, but not more than 10% of total amount. This leads to strong reduction of resources for vocational training and retraining of unemployed.

 

As of 2003 the amended version of this paragraph came into force: “Finances of special employment budget are also used for active labour market measures stated by law “On Assistance to Unemployed Persons and Job-Seekers” (vocational training, retraining, measures for increasing employability), for preventive unemployment reduction measures, as well as for stipends, compensations for transport and rent expenditures for unemployed during the vocational training and retraining courses, but not more than 10% of total special employment budget.

 

According to law “On Assistance to Unemployed Persons and Job-Seekers” preventive measures are vocational guidance, but measures for increasing employability are job seekers clubs. So, PCCC and Job seekers clubs are financed from special employment budget.

 

SES and paid temporary community works are financed from general state budget.


Table 34: Expenditures from state budget for employment (1995 – 2003)[4].

Expenditures from state general budget and state special budget for employment (1995 - 2003)

 

1995

1996

1997

1998

1999

2000

2001

2002

2003

State basic budget - programme The administration of labour market

LVL

2,360,076

2,625,024

2,970,776

4,076,427

4,533,680

5,383,398

7,024,574

6,765,041

6,597,716

% of GDP

0.10 

0.09 

0.09 

0.11 

0.11 

0.16 

0.14 

0.12 

 

Sub-programme The maintenance of SES and development of active employment measures

LVL

791,026

1,061,552

1,297,054

1,433,714

1,633,021

1,616,736

1,756,052

1,769,053

1,813,692

Sub-programme Labour safety and state control and monitoring of labour market legislation

LVL

369,317

414,659

466,398

531,832

649,770

1,615,773

2,902,473

2,629,939

1,117,024

of which foreign aid

929,000

2,197,144

1,943,568

323,749

Sub-programme Paid temporary community works

LVL

1,199,913

1,148,813

1,207,324

2,110,881

2,250,889

2,150,889

2,366,049

2,366,049

3,192,000

Sub-programme Measures for increasing employability

LVL

 -

 -

475,000[5]

State special budget – sub-programme Employment special budget

Expenditures for grants to enterprises and institutions

LVL

2,288,130

2,349,834

2,611,963

4,373,849

5,276,339

4,499,376

4,499,376

2,256,125

2,562,500

% of GDP

 0.10

0.08 

0.08 

0.12 

0.13 

0.09 

0.08 

0.04 

 

of which for training of unemployed

LVL

2,212,250

2,169,180

2,324,193

3,915,800

4,789,090

3,989,090

3,989,090

1,745,125

2,051,500

for job seekers clubs

LVL

103,470

201,300

250,800

280,000

295,000

295,000

295,000

295,000

for vocational guidance

LVL

75,880

77,184

86,470

207,249

207,249

215,286

215,286

216,000

216,000

Expenditures for subsidies to inhabitants

LVL

 n.a.

n.a

n.a

n.a

n.a

n.a

24,554,550

22,567,859

25,520,320

% of GDP

 

 

 

 

 

 

 0.5

 0.4

 

Source: Labour department, Ministry of Welfare; calculations of National Observatory

 


 

Labour market policies are basically passive in Latvia. In 2003 approximately 72% of total labour market expenditures where used for passive measures (benefits), 24 % is foreseen for active labour market measures (funding of SES is also included), 3.3% - for labour safety and labour market legislation and 0.7% for preventive measures (vocational guidance).

 

Human resources

The SES has 554 employees in the end of 2002. 55 of them are working in the central office. The staff is spread across a network of 28 district branches and 34 local co-ordinators. Approximately 420 staff members deal exactly with clients. Based on the registered number of unemployed in 2002 (89,735) the ratio of district/local office staff to total unemployed is approximately 1-to-213. This suggests that the caseload of individual front-line staff in local district offices is relatively high by international standards. This inevitably restricts the capacity of the SES to engage with the unemployed on an individual basis.

 

The staff number of SES has not changed a lot during the last years 1999 – 554; 2000 – 553; 2001 – 554; 2002 – 558; 2003 – 554. It can be expected that caseload of staff will more likely to increase than to decrease due to new assessments and client oriented approach will be necessary in case of widening of functions of PES. The structure and staff of Riga branch is seen in picture 2 in annex.

 

The average age of SES staff is 43.9 years. 93% of staff is women. It is connected with relative low salaries – average 134.08 in 2001 or 84% of average in country or 74% of average in public sector. However the staff turnover is low – only 10%, it is extremely low in regions, where there are less possibilities to find another job. Each staff member has worked within SES in average for 6.7 years, it is not bad for institution who exists only 12 years.

 

The SES staff’s level of education is increasing every year. The employees of SES are not civil servants and demand for higher education is not mandatory for them However, the SES administration tries to hire employees with higher education, which is not so easy due to low salaries.

 

Table 35: The share of education level of SES staff members, % of total

Education

01.01.2001

01.01.2002.

01.01.2003.

Higher

36.5

38.5

42.0

Secondary vocational

36.5

37.0

34.8

Secondary

27.0

24.5

23.2

Source: SES data

 

In 2002, 552 staff members (almost all) were involved in continuing training, 291 were trained in courses organized by local SES offices, 21 participated in training abroad.

Every year the number of SES staff members who enters higher education establishments increase, unfortunately only for 16 of them SES partly covers tuition fees.

 

Table 36: The number of SES staff who studies at higher education establishments

Year

Graduate programmes

Master programmes

1998

27

-

1999

36

5

2000

53

5

2001

78

4

2002

103

10

Source: SES data

 

Infrastructure

Geographical accessibility of SES services is well developed taking account all regional centres and local co-ordinators. But the quality of services could be reached only if staff, infrastructure and premises are suitable to SES and clients needs.

 

The one of the weak points are computerising and internal network of SES, which was started in 1993 and is not finished yet.

The development of internal network and computerising of SES started in 1993, when State Investment project “The computerising of SES” was carried out. In 2001, it was actualised by proposing new State Investment project “Computerising of Latvian State Employment Service” 2002 – 2007. This project is carried out together with Bilateral project “Development of Information Strategy for the Latvian State Employment Service” – Danish Ministry for Employment, 2002. The bilateral project foresees a comprehensive analysis of information flows between SES central office and district offices and between Ministry of Welfare. The informative system of SES is planned to develop within Phare 2002 for institutional building and Phare 2003 for infrastructure. Unfortunately all these development projects are just started or yet to start and the reasonable results could be only in coming years. At the moment the registration is still done on paper fiches and only afterwards date are computerized. All information about vacancies is also available on paper. In information centres clients can use some old-fashioned computers. The first step of accessibility to SES services is the establishment of new SES web page – http://www.nvd.gov.lv. Web page contains 1) information about vacancies registered within SES (from all regions of Latvia) which are not filled for most than a month; 2) data base of CVs (everybody can add its CV) 3) data base of vacancies (employers can directly publish their vacancies). There is also addresses of all licensed private employment bureaus. The information is available for persons who have internet access, not all SES branches can provide this to their clients.

 

Not only in computers, but also in premises investment is necessary. The premises of 9 branches and 7 sectors do not fit to the needs of services provided by SES. Almost none of SES offices can be accessed by physically handicapped persons. Of course, the disabled people are not rejected from SES services, nevertheless the situation is not comfortable neither for SES staff nor for disabled because disabled persons are received and dealt with on the street in front the building.

 

To improve the infrastructure of SES, it has applied for Phare 2002/2003 and 2004.

Use of information technology has been one way in which the SES has sought to improve the quality of its services to clients, because as it is mentioned before, implementation of IT solutions within the SES has been limited.

 

Briefly, the investment of Phare 2002 “Employment Strategy (Institution Building) component Strengthening the SES will concentrate on

  • development of an interactive national database system, with a database of vacancies for job-seekers, a database of job-seeker's CVs for use by potential employers, and a database of information for use by SES officers, educational institutions and other SES partners
  • development of specialised software and hardware for the monitoring and analysis of labour market information, to provide a better basis for employment-policy formulation
  • establishing self-service centres in 5 regional SES offices and 5 centres adapted to disabled needs, this should increase the number of job – seekers able to find a job without direct help from SES, and employers would be able to fill their vacancies faster

 

Apart from ensuring access to labour-market information, it is intended that these centres will provide disabled job-seekers with training in computer skills at various levels, and thus increase their competitiveness in labour market. Computer centres will also give the disabled a chance to work on computers for self – employment purposes.

The project will start in September 2003 with a Phare funding1.8 millions EUR and  total budget 2.140 millions EUR.

 

According to the law On Assistance to Unemployed Persons and Job-Seekers” the coverage of persons who has rights to apply for SES services has increased, but the financing does not. The quality of services mostly depends on enthusiasm of SES staff. The investments in SES infrastructure is really needed.


 

Geographical accessibility of SES services is well developed taking account all regional centres and local co-ordinators. The one of the weak points are computerising and internal network of SES, which was started in 1993 and is not finished yet. Also premises of some SES branches needs investments for providing adequate services.  The problem is adaptation of SES offices for disabled people, almost none of SES offices can be accessed by physically disabled.  The employees of SES are not civil servants and demand for higher education is not mandatory for them, however, taking account all tasks delivered to SES at least higher education could precondition to be employed by SES. Important issue of too little money for active labour market measures, in particular for training and retraining of unemployed. The main formal reason seems to be the rule stating that only 10% of the annual total amount of the special employment budget can be used for training and other active measures (except paid temporary community works). The NEP on the other hand mentions active labour market measures in general and training and retraining in particular as one of the priorities.

The budget for the active measures on regional level could be managed on regional level regarding local needs and  involving local social partners.

3.3. Coverage of public employment services

The registered unemployment rate is almost half of the actually existing, which has been estimated according to the methodology of the International Labour Organisation. There are several reasons for that. Not all people are able to receive unemployment benefit, because the social insurance contributions have not been paid, many are not interested or are not able to acquire retraining, especially persons in pre-retirement age, often it is difficult to meet all the requirements necessary for a registered unemployed person. Besides, it should be considered that the status of unemployed is not given to persons that are not in the working age. It means that not all people who would need SES services receive them as the SES has the mandate to deal only with the registered unemployed. According to the data of LFS only 34% of those who are looking for a job are using the services of the SES. It shows that some part of population do not trust SES, they think it is more effective to find job themselves. So there is a lot to do to improve the image of SES and to overcome stereotypes that it is a shame to be registered unemployed.

 

Table 37: Jobseekers* by main action taken to find a job.

2001

2002

 

41.8

51.1%

Applied to employers directly

51.8

75.4%

Questioned friends, relatives, trade unions etc.

62.0

64.7%

Studied, answered or inserted advertisements in newspapers

1.4

0.5%

Sought land, rooms or equipment to start and enterprise, or applied to register own enterprise for activity licence or loan

29.7

34.7%

Contacted State Employment Service or awaiting results of it

6.2

1.4%

Contacted private employment agency

*One jobseeker may have tried several methods, percents are calculated as share of users of corresponding method against all jobseekers

Source: Labour Force Surveys: main indicators (in the 1st half of 2002) – Riga: CSB,2002.

Social Trends in Latvia. Analytical report. Riga:CSB,2003

 

At the moment the weakest point due to the reduction of financing for active measures is training or retraining of unemployed. In 2002 only one third of those who wished got a possibility to participate in training courses for unemployed. SES together with PCCC organizes selection for candidates. And as tenders for training providers are organized twice a year it may happen that person should wait for half a year to participate in training. So it leads to fact that this active measure does not reach everybody needs. The table below shows the evident decrease in training of unemployed from 45.2% in 1998 to 9.5% in 2002.  The number of unemployed involved in the paid temporary community works has a little increase within last years. The most increase is for increasing employability measures from 7.7 % in 1998 to 57.6% in 2002 (but financing has remained unchanged during last three years). Due to reduced possibilities for retraining the unemployed are interested to receive at least some improvement of skills and are willing to participate in increasing employability activities. Also should be mentioned that increasing employability measures is less costly than other measures.

 

Table 38: The number of unemployed involved in active labour market measures (1998 – 2002).

Year

Unemployed, sent to training

Unemployed, sent to public temporary works

Unemployed, involved in measures for increasing employability

Total involved in ALMM

(100%)

1998

16,602 (45.2%)

12,358 (33.7%)

7,710 (21.1%)

36,670

1999

9,704 (26.3%).

11,404 (30.8%)

15,835 (42.9%)

36,943

2000

10,267 (26.9%)

9,993 (26.2%)

17,940 (46.9%)

38,200

2001

10,269 (20.5%)

15,218 (30.3)

24,667 (49.2%)

50,154

2002

4,830 (9.5%)

16,809 (32.9%)

29,437 (57.6%)

 

51,076

Source: MoW, Labour department

 
Contacts with the employers and number of vacancies

 

SES has established regular contacts with employers. Since 1994 SES carries out surveys of employers about labour market demand and supply. If in 1994 the number of employers participating in survey was 3.2 thousands then in 2002 - 6 thousands (or 12% of all employers).

 

It is not stated by law that employers should register their vacancies within SES. In average 4203 vacancies are registered within one month. The vacancies are available on the SES home page www.nvd.gov.lv. The information is improved twice a month, unfortunately the information is only on vacancies which are not filled within one months.


 

Table 39: The number of vacancies registered within SES (1998 – 2002)

Year

Number of registered vacancies

1998

43,555

1999

44,530

2000

51,986

2001

50,433

2002

48,476

                                  Source: Labour department, MoW

 

Some activities have already been carried out aimed at increasing the effectiveness of the SES. In 1996 with support of Phare project first Job Information Centre was established in Riga centre branch. In 1999 within the twinning project with Danish Labour ministry four Job Information Centres have been established in several regions (in Jelgava, Ogre, Daugavpils, Liepâja). Later on in centres were established in Jçkabpils and Madona. These provide an extended range of services compared with those provided in a typical district or local office. This includes providing information based on a self-service system, together with access to databases on vacancies.  The centres have proved popular, drawing 700-800 visitors every day. The SES has also taken steps to heighten public awareness of its services through information campaigns (leaflets for employers and job seekers, mass media, publication of a monthly bulletin). Local governments and social partners have been involved in these campaigns.

 

In addition, PCCC offer counselling to visitors on occupational choice, professional suitability and on psychological issues related to job seeking, as well as information about educational establishments or the scope of various professions. In 2001, 21,969 people received consultations on issues related to the choice of an occupation, 4373 or 20% of them being registered unemployed and 795 or 3.6% unregistered unemployed. 57% of all consulted registered unemployed was sent to PCCC by SES officials.

 

According to the data of LFS only 34% of those who are looking for a job are using the services of the SES. It shows that some part of population do not trust SES, they think it is more effective to find job themselves. However, there are SES offices in every district town of Latvia, so geographically SES services are accessible to everybody. Not all people are able to receive unemployment benefit, because the social insurance contributions have not been paid, many are not interested or are not able to acquire retraining, especially persons in pre-retirement age, often it is difficult to meet all the requirements necessary for a registered unemployed person. Besides, it should be considered that the status of unemployed is not given to persons that are not in the working age.

SES has established good contacts with employers, however, there is still a lot of space for improvement.  At the moment the weakest point due to the reduction of financing for active measures is training or retraining of unemployed, where the situation should be discussed and improved accordingly country’s needs. Evident decrease in training of unemployed from 45.2% in 1998 to 9.5% in 2002 leads to fact that this active measure does not reach everybody needs

3.4 Range and quality of services.

 

According to the law On Assistance to Unemployed Persons and Job-Seekers” active labour market measures are:

  • vocational training and retraining of unemployed;
  • paid temporary community works;
  • measures for increasing employability;
  • measures for defined target groups, especially for persons from 15 to 25 years of age; disabled persons; persons after maternity leave; pre-pension aged persons; long term unemployed; persons after imprisonment; and other groups according NEP.

 

Vocational training and retraining of unemployed

 

In the SES organised courses for vocational training and retraining is possible to obtain following qualifications and programmes:

  • second level vocational qualification. For that training course the individual needs a basic education,
  • third level vocational qualification. For that training course precondition is secondary education or vocational education,
  •  programmes for updating of vocational qualification and development of employability which is not leading to qualification. These are training courses for unemployed with already obtained respective vocational education.

The number of hours in the programmes differs from 320 till 1240 [6].

 

Due to decrease of financing the number of unemployed involved in vocational training and retraining has decreased slightly in 2002. In 2002 approximately 14% of all registered unemployed wished to participate in vocational training, but only one third of them had such opportunity. SES specialists evaluate the needs of each client and only those who had no speciality or who had necessity to improve their qualification had opportunity to participate in training. However, the chances to get a training are low because only some 5% of registered unemployed are covered by any training programme.

 

Table 40: The number and percentage of unemployed sent to vocational training (2000 – 2002).

Year

Total unemployed

Sent to training

Percentage from total unemployed

Finished training *

Found job

2000

93,283

10,267

11.0

8,338

5,5528

2001

91,642

10,269

11.2

9,194

6,235

2002

89,735

4,830

5.4

5,679

4,528

Source: SES data

* the number of persons finished training includes also persons sent to training in the end of previous year.

 

The most part (63,5%) of persons who was sent to training in 2002 where problem group unemployed – long-term or with low qualifications.

60.7% of those had no vocational qualification; 50% was in age group 30 – 49; 25% in age group 18 – 25. Age group 30 – 49 is more opened for labour market as people already have some work experience and if it is improved they have better opportunities to find job. It is quite difficult to involve youngsters (18 – 25 years old) in vocational training as the most part of registered unemployed within this age group has no work experience and has basic or even uncompleted basic education.

 

The main indicator of efficiency of vocational training and re-training of unemployed is the number of job placement unemployed out of the total number of unemployed who graduated from vocational training and re-training. In year 2001: 6235 persons or 67.8 % unemployed got jobs after graduation from training and the indicator has increased by 1.5 percent points comparing to the year 2000 (66.3 %), but in 2002 even 79.7% founded job within six months. So it shows that the little financing for training of unemployed is used as effective as possible.

 

In year 2002 average costs for training of one unemployed person compared to year 2001 reduced from 434 LVL[7] to 278 LVL because of the following reasons:

·              A high competition at public tenders succeeded in the reduction of training costs of group training in training institutions;

·              Training for unemployed has been organized as close as possible to their residence, thereby travel and accommodation costs were reduced.

 

The procedure of organizing training is rather centralized, complicated and inflexible. In order to choose the most necessary training programmes in 2002 by the request of SES director a special working group was established, who evaluates and makes the final decision on what training programmes are chosen for provision in concrete location. Staff of local SES offices sends their proposals to this group. According to the law “On purchase for state of municipal needs” tenders for provision of concrete training programmes in concrete locations are organized twice a year. The number of educational institutions involved in tenders increase every year (75 participants in 2000, 94 in 2001, 119 in 2002).

 

All these formal procedure makes the process very long. It takes almost a year from the moment when tender is announced and the unemployed person finishes training. So it does not fit to the demands of employers who want to get workers as soon as possible. SES organises groups of unemployed for training also by request of employers, but then employers are obligate to employ these persons for a year.

 

One of the ways to make system more flexible could be that tenders are organized once a year only for institutions rights to provide several training programmes, and then according to labour market needs local SES offices asks the institutions to provide the necessary programme.

 

As in 2003 the financing for retraining remains low, SES has started to work with employers in order to get co-financing for training of unemployed.

 

Measures for increasing employability (MIE)

 

The term measures for increasing employability appears with the new law On Assistance to Unemployed Persons and Job-Seekers”, before term Job seekers clubs was used.

MIE is an active employment policy aimed at stimulating the self-initiative of unemployed person, the ability to reorient oneself as well as to psychology adapt to the situation on the labour market.

The number of people involved in MIE increases year by year, but financing remains the same and is not increased in 2003 as well.

 

Table 41: The financing of MIE and number of unemployed involved.

Year

Financing for MIE LVL[8]

Unemployed involved

Expenditures per one unemployed LVL

1997

201,300

5,501

36.59

1998

250,800

7,710

32.53

1999

280,000

9,637

29.05

2000

295,000

17,940

26.05

2001

295,000

24,667

23.54

2002

295,000

29,437

22.88

Source: SES data

 

The main activities for increasing employability are;

  • group activities (How to find job etc.);
  • group activities for target groups – for example, unemployed;
  • Latvian language courses;
  • information days, lectures, meetings with employers;
  • individual consultations with lawyer, psychologist, CV consulter, vocational consulter;
  • tests of individual skills and abilities.

 

After the participation in MIE, 9221 or 31% unemployed found job in 2002. The demand for MIE was high in 2002 and it was not possible to involve all who wanted.


 

Paid Temporary Community Works (PTCW)

 

Paid temporary community works are organised in two parts: 1)term paid temporary community works with the purpose of employing the individual on short-term basis for acquiring means of livelihood; 2) tenders for the projects of paid temporary community works with the purpose of creating new working places at already existing enterprises where job placements are provided for the unemployed. The main target group for PTCW is individuals with difficulties to find a job but who wants to work. The PTCW are not demanding certain education level or qualification. The main PTCW are cleaning and improvement of territories (cutting of grass, cutting and burning of bushes); improvement of tourism objects, improvement of culture and leisure objects, work in disabled and oldsters social care

The interest and demand for public works is much higher than the supply – only 57.6% of those who wanted could participate in PTCW in 2002.

 

Table 42: The financing of PTCW and number of unemployed involved

Year

Financing LVL[9]

Average duration in months

Unemployed involved

1998

2,110,881

4

12,358

1999

2,250,889

3.6

11,404

2000

2,150,889

3

9,993

2001

2,366,049

3

15,218

2002

2,366,049

2.8

16,809

Source: SES data

 

The main partners for PTCW implementation are municipalities (84% of financing). In order to avoid exclusion from working life, PTCW are widely used in depressed areas where unemployment rate is very high. 45% of financing was used for Latgale region. It should be mentioned that PTCW are opportunity for unemployed to earn additional money, what in many cases is the main reason why they want to participate in PTCW. However, the paid PTCR works are more deskilling and in reality does not help in the increasing of employability. 

 

In the Year 2002 some 9 % of total PTCW budget was spent for pilot projects of paid temporary community jobs for creating new working places.

 

Measures for defined target groups, especially for persons from 15 to 25 years of age; disabled persons; persons after maternity leave; pre-pension aged persons; long term unemployed; persons after imprisonment; and other groups according NEP.

 

These measures are starting to implement since 2001. There were no special financing for these measures in the budget of 2002, so they were financed as pilot-projects from budget of PTCW. In total 186,935 LVL (9 % of total PTCW) were used. In the year 2002 it was 478 working places, which is not so much in comparison with the number of unemployed in Latvia. 

 

“Subsidized work practice for unemployed youth”; aimed at youth of 18 – 25 years of age who have an insufficient or lack of working experience. Unemployed youth are offered to practice for 6 months at specially established work places in enterprises. SES pays minimal wages for the unemployed and 25 LVL for mentors of each unemployed participant. In 2002 first 93 youngsters finished their practice and 69 (74%) found job. In 2002, 264 youngsters started practice – 106 have already finished it, 80 (75%) found job. This pilot project is very popular among employers. 438 employers have expressed will to organize subsidized work practice for 1249 youngsters in 2003.

 

“Social enterprises for long-term and pre-retirement age unemployed”; there is a low demand in the labour market for elder or pre- retirement age labour force and those dislocated workers who haven’t been employed more than a year. With establishing social enterprises it is considered to keep problem group unemployed in work for at least 4 years. SES grants promotes establishment of job places and also wages of unemployed (from 100% of minimum salary at the first year until 60% in the fourth year of the enterprise). In 2001, the first tender was organized and only 2 of 34 applications were approved. So in 2002 only 11 job places in social enterprises was established, instead of planned 50.

 

“Subsidized work places for pre-retirement age unemployed”, are aimed to employ pre-retirement age unemployed for 10 months in order to help them improve their skills and get back into labour market. SES pays minimum wage for the unemployed. This project started in May, 2002 and already 133 working places were established till the end of year.

 

“Subsidized work places for unemployed with disabilities”; SES grants minimum wage for disabled persons and 25 LVL for their mentors as well as efforts the employer to adjust work places to the needs the disabled persons. Involvement of employers was rather inactive and it was very difficult to find partners in co-operation, however there were 30 subsidised work places established of which 12 work places were adjusted to needs of disabled persons by using SES grants. In 2002, 27 unemployed with disabilities finished this project – 22 (81%) found job. This measure is the only one who will get additional financing in 2003 (475,000 LVL). It is planned to establish 300 working places for unemployed with disabilities in 2003. This means a lot of work for SES staff, as employers are not interested in it, only 22 (of 7511 surveyed) employers is ready to involve in total 38 unemployed with disabilities.


 

SES provides mainly three services – training, paid temporary community works and increasing employability measures. Due to reduced financing there is not enough training possibilities for unemployed, the main emphasis is stressed to temporary works and employability measures. Chances to get training are low because only some 5% of registered unemployed are covered by any training programme tat does not fit country’s needs. The paid temporary community jobs are not demanding certain education level or qualification and actually are more deskilling and in reality does not help in the increasing of employability. Increasing employability measures are less costly activity and therefore is involving more people, however, it is not dealing with vocational qualifications.

Working places for defined target groups are developed, however 478 per year does not fit demand. Due to the lack of financing SES services are not accessible for everyone who would like to participate.

SES has not introduced any service for people who are not unemployed at the moment, but who know they will loose job after some time. Furthermore, the fact that the number of registered vacancies is relatively high indicates that training and retraining could become an even more efficient labour market measure.

 

  3.5. Role of private employment services (PRES)

 

Private-sector providers of employment services started their activities in 1996. Furthermore, the advent of the Internet has vastly increased the scope for new initiatives by all kinds of potential actors in the job market. But as it is seen in table 37, only 1.4% of job-seekers have contacted private employment agencies.

 

The provision of private employment services is regulated by the same laws as for SES. According to the law “On Assistance on Unemployed and Job Seekers” private institutions can offer the following services:

·        information on vacancies in Latvia and abroad;

·        employment mediation;

·        vocational training and guidance.

 

The services can be free of charge or paid both to the job seekers and employers. PRES must have a licence for the services in the field of employment. An application must be submitted to the SES what establishes the format of licence and issues them. The application must be approved or refused within 10 days after the day of application.

 

The main indicators of PRES in 2001 are as follows:

vacancies registered in Latvia – 37136;

vacancies registered  abroad  -   2919;

total – 40 055.

registered clients (job seekers) –23 434;

placement – 9616.

 

In order to avoid the dishonest companies who would like to hide their illegal business (for example recruiting individuals to work illegally abroad) under the shelter of recruitment company, government has made more strong requirements for those who want to provide these services, which cause the decrease of PRES as you see in table below.  As of January 29, 2003 the new CoM regulations Nr.26 (2003) “The procedure on licensing and monitoring the legal bodies providing recruitment services for charge” comes into force. Now a licence of SES is needed for PRES. The licence should be prolonged every year.

 

Until this procedure came into force only registration within SES was required. SES has the duty to supervise all registered companies, for example, in 1999 – 29 registration certificates was revoked, in 2000 - 32.

 

Table 43: The number of registered companies who have rights to deal with recruitment. 

1996

1997

1998

1999

2000

2001

2002

73

63

58

43

48

19

18

Source: SES data

 

The main aim of the PRES control is to achieve the situation that all job places found though PRES (in Latvia and abroad) are legal ones.

 

The role and impact of PRES in Latvia is not high.

The main target group of PRES are middle and higher level specialists. The majority of their clients are stable middle size enterprises who could allow to pay for recruitment services.

Recruitment services via internet also becomes more and more popular in Latvia . However, the number of PRES in Latvia is decreasing after stronger quality control for PRES services.

3.6. Reforms of the PES

Year by year improving its services SES has reached more people. The new development strategy of State Employment Agency for years 2003.- 2007 is prepared.

 

As from 2002, the SES plans to evaluate the accessibility and quality of its services, including regular collection of information on the level of public awareness of its services.

 

It is known that capacity of SES is not enough for work with ESF, so SES staff has started to be trained for work with ESF. It is planned to take additional staff in regions for work with ESF. The international experts has estimated that 3-5 employees in each region should be necessary.


 

3.7. Support for implementing the EES.

 

“The guidelines on administration, monitoring and evaluation of EU structural instruments” which was adopted by CoM in 19 March, 2002 stated the SES as one of the intermediate institutions for the administration of ESF. 

For improving the SES capacity for administration of ESF the new unit with four employees was established in July 2002. At the same time  the training of SES staff on ESF issue was organised.

Three following Phare projects has helped to prepare SES staff for implementing EES:

  • 97-5377.00 “Support of Development of Employment Policy for Labour Department and SES in the context of EU accession”; SES staff participated in the conference on best EU practice in employment policy , recommendations for improvement of Latvian labour market policy have been made;
  • 97-5482.00 “Institutional Development and Improvement of Effectiveness of Active Labour Market Measures of SES in the context of EU accession” – SES specialists were prepared to take care of SES personnel training in a long term perspective.
  • LE02.06.01 “Employment Strategy (Institution Building)”, which is not started yet.

The Phare 2002 project comprises two components for policy development and policy implementation. The project’s activities will focus on capacity building for preparation and implementation of National Employment Strategy; preparation for ESF; strengthening the SES, and strengthening the PCCC.

 

 

SES has applied also for Phare2003/2004 project “Employment strategy Infrastructure”. This project will comprise three components for capacity development for labour market data analysis; improvement of information exchange system in SES; Preparation for SES participation in EURES network and free movement of persons.

 

It is foreseen that two last projects will improve infrastructure of SES and increase its capacity, so this will guarantee the openness, accessibility of services and transparency of information concerning job as set in JAP.

 


 

4.                                                                                         Conclusions

 

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. The report was focused on analysis of Latvian education and employment system readiness to labour market needs. The IVET policy in country is developed since 1990. The legislation now is in place and is covering all conditionalities for successful implementation of IVET policy, however it is limited by the lack of resources. The GDP in Latvia is rather small in absolute figures (GDP per capita is only one third of EU average) while the percentage for education is close to EU level. Nevertheless, the existing financing of IVET does not ensure the development. The more attention should be paid to the development of CVT and LLL policy.

 

Legal framework.

The legal framework is covering all education levels. There are no separate law on adult education and  the LLL is not explicitly defined in educational laws. However, the Law on Education defines adult education as multiform education process of individual, which support development of personality and competitiveness in labour market for a lifetime.

 
Institutional setting

The institutional setting of IVET is well developed. The main challenge is that IVET schools are under supervision of different ministries that hinders to use effectively existing resources, not only financial but others as well. The institutional setting of CVT and LLL is not clearly defined. Responsibility for LLL is spread even within MoES. The co-ordination mechanism for LLL and CVT is weak.

The school setting is well developed. The experts opinion is that there is no need for the establishment of new schools, however, the existing schools should not be closed and the improvement of effectiveness should be reached through usage also for CVT and LLL. It should be mentioned that CVT and LLL setting on regional level is rather weak.

 
VET policy

The VET issue is stressed in many strategic documents such as Education Development Concept, National Employment Plan, Single Programming document etc.

All strategic documents (in both fields - employment, education and training) do not define quantitative strategic targets (eg to increase/decrease VET participation) and priorities. That makes the monitoring of the policy implementation practically impossible. The quantitative targets and the estimation of the needs for funding are implemented in sectoral strategies e.g.: VET development, HE strategy, promotion of IT; promotion of employment of disadvantaged groups, however, these sectoral strategies sometimes remains outstanding as funding for them are not found.

There is no exact and clear concept as regards to CVT and adult education in Latvia.

There is a lack of life-long learning policy as well. The Concept of Education Development 2002-2005 is focused more on vocational aspect of life-long learning. At the same time vocational training (employability and adaptability) centred approach have to be balanced and includes also learning for active citizenship and self-fulfilment.

The role of CVT and adult education in this aspect of life-long learning has to be specified.

 

Financing of VET

A significant barrier to the improvement of the system is a lack of financial resources, which hinders further development.  The development of vocational standards for a greater number of qualifications is hampered, as is the renewal and modernisation of facilities and equipment at vocational schools.  There is a lack of funds needed to assure teachers the right to receive a paid one-month leave once in three years for professional development purposes.

 
VET teachers

There is a high need for teacher training (technological and pedagogical). From 2004 all teachers have to have pedagogical education, however, it is up to teachers to take care for training. Assistance of education or local administration is very limited. Teachers work on average 1.2 – 1.3 times of official 21 contact hours teaching load with some excessive workload of up to 30-40 hours per week. This is due to low salaries (looking for additional income). In 1999 the progressive increase of salaries was agreed with the government. However the implementation of that settlement does not progress in accordance to agreed schedule.

 
VET system

The VET system is set up and education programmes are provided within three education levels – basic, secondary an tertiary. However, the horizontal path-ways on secondary level are limited. The system for recognition of credits obtained in continuing vocational education for acquiring formal qualifications is not developed yet. Other problem is prestige of VET programmes which need to be improved.

The comparatively large number of drop-outs is regarded as a negative trend. The major reason of dropping out usually is unproficiency, which is the result of the very poor basic education background of students entering the vocational schools

The VET system has a quite strong practice orientation. However, enterprises complain about the low level of knowledge and skills of students and students (receiving even a small salary) are not properly catered by the company. Incentives to the enterprises could improve the quality of work practice and its learning outcomes.

The lack of a vocational guidance system can be considered a weakness in current vocational education.  Of course, there is the Career Counselling Centre which acts under the supervision of the Ministry of Welfare and whose capacity is limited by a lack of resources, however it does not encompass all schools and all learners.

 

Labour market demand analysis

Besides, there are difficulties concerning needs forecasts to determine which qualifications and how many trained workers will be required in the future.  Employers’ surveys are performed at the level of individual regions or sectors, but this is insufficient, and it is necessary to develop and utilise labour market forecasting methods. Up to now there are no appropriate mechanism for getting data about the skills demanded in the labour market useful for medium- and long-term forecast needs of occupations. For that promotion of research on the labour market issues is necessary. One of the solutions would be setting up research centre that would do labour market research and monitoring.

 
Involvement of social partners

The tripartite social dialogue is well developed in Latvia only at the national level, the Tripartite Sub-council for VET and employment works regularly since 2000.  Nevertheless in the regional and school level it does not work appropriately. However, the involvement of social partners in VET still needs improvement.

 
Social exclusion

In spite of development of educational reforms, there are still some problems what are an obstacle for successful integration of society.  The basic guidelines for education foresees the access to adequate education for all, however, the reality sometimes is different.  There are still children who drop out of education system, the state support for families with children is not sufficient. The problem tackles more the population groups with a low income. The social exclusion on ethnic bases is not characteristic to Latvia’s society.

CVT and adult education programmes have to be more accessible for people on countryside. There are important financial limits, territorial differences and aspects connected with social exclusion. CVT programmes have to be more oriented to the development of entrepreneurial skills.

 
Gender equality

Gender inequality in education and labour market has not been addressed sufficiently in practice and on policy level. More attention should be addressed to male successful participation in education, teaching professions. Serious attention needs to be paid to decrease disadvantages of female in the labour market. The Labour law is in place and not allow a discrimination, however, there are several stereotypes in everyday life. In spite on higher education level, the average salaries for women are lower.

 
Entrepreneurship skills development

Integration of entrepreneurship in VET and higher education programmes curricula is well developed, nevertheless, it needs to be developed in CVT. Business education in CVT field should be oriented not only on preparation of employees, but mainly on preparation of employers and promotion of entrepreneurship.

 

Legal and institutional structure of public employment services

The legal and institutional structure of public employment services has been developed since 1991, setting the direct duties for each organization. SES is responsible for implementation of state employment policy, however it deals only with active labour market measures. SES is more oriented on people out of labour market and is not dealing with preventative measures at all. The new law “On Assistance to Unemployed Persons and Job-Seekers” increases the coverage of population who can reach the services of SES, but results of this could be seen only after some time. The new law points an important shift from ‘protecting unemployed’ to ‘reduction of unemployment and assistance to job-seekers’.

Geographical accessibility of SES services is well developed taking account all regional centres and local co-ordinators. The one of the weak points are computerising and internal network of SES, which was started in 1993 and is not finished yet. Also premises of some SES branches needs investments for providing adequate services.  The problem is adaptation of SES offices for disabled people, almost none of SES offices can be accessed by physically disabled.

 

Involvement of social partners in PES

The tripartite social dialogue is well developed in Latvia only at the national level, nevertheless in the regional and enterprises level it does not work appropriately. However, the involvement of social partners in PES in Latvia still needs improvement.

 

Financial resources for active measures

Important issue of too little money for active labour market measures, in particular for training and retraining of unemployed. The financing for that decreases from 3, 989,090 LVL in 2001 to 1,745,125 LVL in 2002. The main formal reason seems to be the rule stating that only 10% of the annual total amount of the special employment budget can be used for training and other active measures (except paid temporary community works). The NEP on the other hand mentions active labour market measures in general and training and retraining in particular as one of the priorities. However, the decrease of funds should be revised and possibilities to improve the situation should be found. Also the budget for the active measures on regional level could be managed on regional level regarding local needs and involving local social partners.  Due to reduced financing there is not enough training possibilities for unemployed, the main emphasis is stressed to temporary works and employability measures. Chances to get training are low because only some 5.4% of registered unemployed are covered by any training programme, which does not fit with needs of society.

 

Access to unemployment benefit and active measures

According to the data of LFS only 34% of those who are looking for a job are using the services of the SES. It shows that some part of population do not trust SES, they think it is more effective to find job themselves. However, there are SES offices in every district town of Latvia, so geographically SES services are accessible to everybody.  SES has not introduced any service for people who are not unemployed at the moment, but who know they will loose job after some time. Furthermore, the fact that the number of registered vacancies is relatively high indicates that training and retraining could become an even more efficient labour market measure.

Not all people are able to receive unemployment benefit, because the social insurance contributions have not been paid, many are not interested or are not able to acquire retraining, especially persons in pre-retirement age, often it is difficult to meet all the requirements necessary for a registered unemployed person. Besides, it should be considered that the status of unemployed is not given to persons that are not in the working age.

At the moment the weakest point due to the reduction of financing for active measures is training or retraining of unemployed. Evident decrease in training of unemployed from total involved in active measures (45.2% in 1998 to 9.5 % in 2002) leads to fact that this active measure does not reach everybody needs

The main conclusion for this investigation is that Latvia has done a lot for improvement of VET and employment services.  School based VET system is well developed, nevertheless it need more development for equipment and raising of prestige. The more attention on policy level should be paid to the alternative path for VET and CVT, the system of acquiring of competence based VET qualifications for adults need to be developed. The access to CVT is not sufficient for everybody. The state strategy on development of basic skills should be discussed.  The discussions on necessity of LLL strategy are needed because the LLL issue is overspread between different laws and the development of LLL is unclear. The promotion of employers to invest in education of their employees should be improved. Regarding PES, the evident improvement is done since 1990, however, the more attention should be paid to IT development within PES, the accessibility of PES offices for disabled. The financial coverage for retraining of unemployed population should be discussed.

 


 

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Social Trends in Latvia 2003 – Riga, CSB, 2003

 

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

 

Statistics in focus / Population and social conditions – Theme 3-8/2002 – Eurostat, 2002.

 

A survey of the information technology, telecommunications and electronics sector in LatviaRiga, 2000.

 

Vocational Education and Training and the Labour Market in LatviaRiga, Latvian National Observatory, 2001.

 

Vocational Education and Training in Latvia - a national report to the European Training Foundation, Latvian National Observatory 1999.

 

Yearly Report of Ministry of Education and Science 2002.

 

 

 

 

 

 

 

 

 



[1] The law defines the jobseeker as an individual, who are registered in State Employment Agency and who (1) lost the status of unemployed; (2) is rejected from status of unemployed as a retired person; (3) the job agreement is broken. 

 

 

[2] The SSIA as non profit organization was established in 1998. Agency has 1200 employees and 33 territorial branches.

[3] The SES was established in 1991.  The branches was located in all country.  In the beginning of 1999 the structure comprises the central office, 20 centers, 8 divisions and 38 bureau’s.

[4] 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)

[5] this sum is devoted for the establishment of 300 subsidized working places for handicapped people

[6] data from the SES

[7] 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)

[8] 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)

[9] 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)