Unemployment on a downward trend; despite that, the high unemployment enclaves require structural policy
Unemployment continues on a downward trend while employment is on the rise, pointing to a further recovery of the Latvian labour market. In early 2013 the rate of jobseekers (12.8% of the economically active population) was 3.5 percentage points lower year-on-year and 8.8 percentage points lower in comparison with the lowest point of the crisis three years ago.
Thus, with the number of jobseekers falling, the issue of the factors ensuring further economic growth will become increasingly topical in the future. Labour productivity growth certainly still is one of the directions with great potential in Latvia. However, a more efficient involvement of the economically active population still has a way to go. Progress in this area will depend on the structural reforms implemented in Latvia related to developing evenly distributed employment in this country.
Improvements in the economy's "average outlook" suggesting Latvia has had one of the most rapid employment growth rates in the EU for several consecutive years) are basically driven by job creation in Riga and the big cities and their neighbourhoods. In Latgale, however, the number of jobs has not increased over the last year (labour survey and business survey data published by the Central Statistical Bureau of Latvia), with striking unemployment "enclaves" remaining unchanged. For example, in Baltinava, Viļāni and Zilupe municipalities 26%–29% of working-age population are still registered as the unemployed at the State Employment Agency (had the regular approach (against the economically active population) been applied when estimating the unemployment rate, it would be even higher; moreover, it should be kept in mind that it is only the registered unemployment rate).
There is reason to believe that the roots of the unemployment in these enclaves are of structural nature as high unemployment is characteristic there already since the 1990ies. It means that improvement in Latvia in general (meaning Riga and its neighbourhoods) will be of little help for the above municipalities. The unemployment enclaves would rather benefit from a special employment promotionat programme, targeted towards specific municipalities and developed on the spot, being aware of the specific local situation and factors.