Assessment of Labour Market Elasticity in Latvia

3/2005

Abstract
Latvia's accession to the EU and its resolute policy oriented toward a full-fledged participation in the EMU, have highlighted the need for a profound investigation into the country's labour market. A flexible labour market is a key policy instrument for a country in the single currency area to ensure an escape from the adverse effects of asymmetric shocks. Labour market flexibility will determine how efficiently the economy of Latvia will develop in the period following its accession to the EU. The paper deals with flexibility of Latvia's labour market using the dynamics of market indicators and assessing its institutional framework.

Key words: labour market flexibility, flexibility of wages, institutional framework

JEL classification codes: C22, E24, J20, J50, R23