Registered unemployment in Latgale close to level in 2004

In September, the registered unemployment level in Latvia continued to drop, going down 0.2 percentage points and reaching 11.6% of the economically active population by the end of the month. The number of registered unemployed (131.7 thousand people) is currently one third less than at the peak of unemployment 18 months ago.

In contrast to the 2010 trend, this year unemployment in Latgale has dropped rather rapidly, shrinking under 20% for the first time in two years and approaching the indicators of 2004. The drop in unemployment was promoted both by the opening of new jobs and gradual restructuring of the "100 lats" programme, which probably took away some of the motivation to register with the State Employment Agency (NVA).

On the one hand, the number of filled vacancies in the first six months of 2011 was up 4.2% year-on-year, which was twice the average increase nationwide (data of the business survey conducted by the Central Statistical Bureau (CSP)). With the workload growing for those employees for whom it was cut during the crisis, the number of full-time employees in Latgale grew 4.8% in the first six months.

On the other hand, cutting the monthly temporary work stipend from 100 to 80 lats as of July of this year as well as the scheduled completion of the programme in November of this year acted to diminish the motivation of long-term unemployed to register with the NVA. It is Latgale where the changes in the temporary work programme have the most significant effect on registered unemployment – both because it has the greatest percentage of long-term unemployed in Latvia  (55% of the unemployed have been registered with NVA for more than a year against the national average of 44%) and because of the small difference between the average salary and the programme stipend. The (official) average monthly net salary for full-time work is only a little over 200 lats in the private sector.

It must be noted that a part of the current participants in the "100 lats programme" had not had and had not looked for work for a very long time, i.e. they were not jobseekers in accordance to the international labour survey methodology[1]. For instance, the level of registered unemployment in Latgale exceeds the percentage of jobseekers within the framework of labour surveys even according to official data (e.g., in 2010 – respectively 22.4% and 18.7%). The actual excess is even greater[2]. Also, since most of the participants do not feel that their participation in the programme much improves their ability to find permanent employment[3], some of them will probably not seek employment even after completing the programme. As a result, in the CSP survey, some of them will appear not as jobseekers but in the economically inactive catagories "lost hope of finding work", "housewives" etc.

It is possible that  introducing the new temporary work programme as of 2012, albeit on an estimated 2-3 times smaller scale than the "100 lats programme", will once again raise the motivation to register with the NVA (particularly in Latgale), decreasing the possibility that as early as next year the level of registered unemployment could reach a one-digit number.

[1] As jobseekers, the CSP considers such persons that in the week surveyed did not work anywhere and were not temporarily absent from work, (vacation, illness etc.), have been actively looking for work in the past four weeks and, upon finding it, were ready to start working within the next two weeks..

[2] In calculating registered unemployment, the CSP survey data on the average number of economically active population of the previous three years. That exceeds the actual number of economically active population (particularly in Latgaale), both because the official number of economically active population is shrinking over time and because the official statistics does not measure the flow of migration (in the direction of Riga and abroad).

[3] According to a survey by the Latvian Academy of Agriculture and Forest Sciences, 72% of the participants of the "100 lats programme" did not feel that their participation in the programme had any effect on their ability to find permanent employment: http://www.nva.lv/index.php?cid=2&mid=2&txt=2427&from=10


APA: Krasnopjorovs, O. (2023, 01. dec.). Registered unemployment in Latgale close to level in 2004. Taken from https://www.macroeconomics.lv/node/2289
MLA: Krasnopjorovs, Oļegs. "Registered unemployment in Latgale close to level in 2004" www.macroeconomics.lv. Tīmeklis. 01.12.2023. <https://www.macroeconomics.lv/node/2289>.

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