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1. Sebastian Königs
Economist
Directorate for Employment, Labour and Social Affairs
Investing in Youth
Latvia
Riga, 27 August 2015

2. • Young people in Latvia have been hit severely by the Great Recession.
Today, the share of young people not in employment, education or training
(‘NEET’) is back close to the OECD average, but large regional disparities
remain.
• Only about half of all NEETs are looking for a job (unemployed), while the
remainder is inactive (often for childcare or health reasons).
• NEETs tend to accumulate various forms of disadvantage: low education,
health problems, less favourable parental background.
• Latvia’s vocational education system has long suffered from a lack of
attractiveness: work-based training should be extended, ideally in an
apprenticeship-style framework.
• The Youth Guarantee is a great opportunity for bringing NEETs back into
education or work. Remaining challenges are a lack of administrative
capacity and co-ordination, low programme participation among the most
disadvantaged, and institutional obstacles to a quick introduction of the
planned outreach services.
Main findings
2

3. Labour market outcomes
for youth in Latvia

4. The youth population has shrunk
dramatically over the last decade
Source: OECD calculations based on the Latvian Labour Force Survey and CSB data
left panel: size of the youth population (left axis: absolute count, right axis: relative rate)
right panel: causes of the change in the youth population from 2002-13, by age group (%)
4
17
18
19
20
21
22
23
-
100,000
200,000
300,000
400,000
500,000
600,000
15-19 yrs 20-24 yrs 25-29 yrs Youth / Population (in %)
-22%
-46%
-10%
-6%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
All
youth
15-19
yrs
20-24
yrs
25-29
yrs
fertility effect migration effect total effect

5. Young people have been hit hard during
the economic crisis
1. Numbers are for individuals aged 15-29 years.
Source: OECD calculations based on the Latvian Labour Force Survey and OECD Employment Database
(www.oecd.org/employment/database)
left panel: employed youth as a share of the total youth population (%)
right panel: unemployed youth as a share of all active youth (%)
5
40
45
50
55
60
65
70
Latvia Estonia Finland OECD Average
30.0
40.0
50.0
60.0
Youth employment rate
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Youth unemployment rate

6. Only few young people in Latvia combine
study and work
1. Statistics are for young people aged 15-29 years.
2. Results are for 2012 except for Latvia (2013).
Source: OECD calculations based on the Latvian Labour Force Survey, EU-LFS and national labour force surveys
Labour market status of youth in %, 2012/13
6

7. Half of all NEETs in Latvia are not looking for
work, but this share has been declining
1. Statistics are for young people aged 15-29 years.
2. Results in the right panel are for 2012, except for Latvia (2013)
Source: OECD calculations based on the Latvian Labour Force Survey, EU-LFS and national labour force surveys
Inactive and unemployed NEETs as a share of the youth population in %, 2012/13
7

8. NEETs rates are much higher in Latgale and Zemgale,
which benefited little from the recovery
1. Statistics are for young people aged 15-29 years.
2. Results in the right panel are for 2012, except for Latvia (2013)
Source: OECD calculations based on the Latvian Labour Force Survey, EU-LFS and national labour force surveys
Left panel: NEET rates in % by region, 2013
Right panel: change in NEET rates in percentage points by region
8

9. Who are those not in employment,
education or training (NEETs)?

10. NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-29 years.
2. Results are for 2013
Source: OECD calculations based on the Latvian Labour Force Survey 10
… be femaleBreakdown of NEETs in Latvia
by sex (in %)
NEET rate in %
11
6
7
9
women men
unemployed NEETs
inactive NEETs
55
45
women
men

11. NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-29 years.
2. Results are for 2013
Source: OECD calculations based on the Latvian Labour Force Survey 11
… be female
… be aged in their (late) 20s
Breakdown of NEETs in Latvia
by age (in %)
NEET rate in %
4
8
12
2
11
9
15-19
years
20-24
years
25-29
years
unemployed NEETs
inactive NEETs
9
4348
15-19 years
20-24 years
25-29 years

12. NEETs are more likely than other youth to…
1. Results are for 2013
2. The term “low-educated” is used to describe individuals with at most lower-secondary education (ISCED levels 0-2);
“medium educated” refers to individuals with upper- or post-secondary education (3-4), and “highly-educated” is used to
describe individuals with tertiary education (5-6).
Source: OECD calculations based on the Latvian Labour Force Survey 12
… be female
… be aged in their (late) 20s
… have at most ‘basic education’
NEET rate in %
(25-29 year-olds)
Breakdown of NEETs in Latvia
by educational attainment
(in %), 15-29 yr-olds
22
11 9
17
11
4
low edu
medium
edu high edu
unemployed NEETs
inactive NEETs
30
52
18
low edu
medium edu
high edu

13. NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-29 years.
2. Results are for 2013
Source: OECD calculations based on the Latvian Labour Force Survey 13
… be female
… be aged in their (late) 20s
… have at most ‘basic education’
… have non-Latvian ethnicity
NEET rate in % Breakdown of the number
of NEETs by ethnicity
(in %)
8
10
7
11
ethnic
Latvians
other
ethnicities
unemployed NEETs
inactive NEETs
61
39
ethnic Latvians
other ethnicities

14. NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-24 years.
2. Results are for 2008
Source: OECD calculations based on the European Health Interview Survey (EHIS) 14
… be female
… be aged in their (late) 20s
… have at most ‘basic education’
… have non-Latvian ethnicity
… suffer from physical or mental
health issues
 accumulation of disadvantage
Share of youth who report
health problems in %
4
1
15
7
10 3
19
9
14
8
18
2
Has been very nervous
(past 4 weeks)
Has felt downhearted
and depressed
(past 4 weeks)
Non-NEETs NEETs
14
25
Physical limitations
(past 6 months)
4
15
Has been very nervous
(past 4 weeks)

15. … and also NEETs’ parents tend to be more
disadvantaged
1. Statistics are for young people aged 16-29 years.
2. Numbers are for 2012, except for Latvia (2013), Belgium (2011) and Ireland (2010)
Source: OECD calculations based on EU-SILC 15
Share of youth and NEETs living with workless parents
(in % of those still living with their parents)

16. Periods out of education or work moreover tend to
be widespread and long in duration
16Results based on OECD calculations using the longitudinal EU-SILC, 2012.
When followed over a 48-month period,
• 55% of all Latvian youth spend at least some time at NEETs
(compared to less than 30% in Norway)
• 40% of youth have a single ‘NEET spell’ of more than six months’
duration
• 30% of youth spend more than 12 months as NEETs (across spells)
… and women, youth with little education and those in poor health are
most likely to report long periods of NEET status
Disclaimer:
These results are based on data from the crisis years 2009-12

17. Providing high-quality
vocational education and training
in Latvia

18. Vocational education in Latvia has suffered
from low attractiveness and high drop-out
18
• Latvia’s vocational education system is perceived to be
among Europe’s poorest (EC, 2011)
• Enrolment rates in vocational education are low (39% of all
secondary students, compared to 50% across the EU)
• Dropout rates are relatively high: ~25% over the course of a
programme
• The practical component of vocational education is largely
school-based; where company-based training is provided,
this is little regulated:
structure…? contents…? pay…?

19. Latvia has taken important steps to reform its
vocational education system
19
• consolidation of the network of vocational training institutions:
– establishment of VECCs as modernized hubs for the provision
of vocational education
– merger or closure of smaller training institutions
• establishment of Sectoral Expert Councils and their involvement in
the revision of occupational standards and programme contents
• ongoing ‘work-based learning’ pilot provides a small-scale test of
apprenticeship-style matching of students to employers
(though without providing students with formal work /
apprenticeship contracts)

20. OECD recommendations
20
Expand work-based training in vocational education, ideally through
introduction of an apprenticeship-style system
Ensure training quality through introduction of an appropriate legal
framework:
• work / apprenticeship contracts that specify the rights and
responsibilities of schools, employers and students
 financial compensation for apprentices
• standardized training curricula and examination procedures
Challenges:
1. large number of micro-enterprises:
 possibility of ‘sharing’ apprentices across multiple employers
2. too high perceived cost to employers:
 consider (temporary?) provision of financial incentives (subsidy,
tax credit, lower minimum wage, levy financing) in return for high-
quality training

21. Offering employment or training options
to NEETs in Latvia

22. The YG represents a great opportunity for
bringing NEETs back into education or work
22
• The Great Recession led to a massive inflow of registered job
seekers:
– 4x increase in registered job seekers < 25 years (2008-10)
– 4x increase in young jobseekers registered over 6 months (2008-10)
• Participation in ALMPs has typically been weak in Latvia compared
to other European countries
Introduction of a Youth Guarantee in 2014 in three phases:
1. strengthening employment services for unemployed youth
2. developing ‘second-chance’ learning options for the low-skilled
3. improving outreach to inactive youth

23. In 2013, about 30% of NEETs were non-
registered without health or family reasons
23
Breakdown of NEETs by registration status and reason for inactivity
NEETs aged 15-29 years by status, in 2013
Unemployed
NEETs -
registered,
19,800 , 31%
Unemployed
NEETs - non-
registered,
11,000 , 17%Inactive NEETs -
others, 8,300 ,
13%
Inactive NEETs -
health
problems,
4,300 , 7%
Inactive NEETs -
non-formal
education,
1,200 , 2%
Inactive NEETs -
family reasons,
18,400 , 29%
Source: OECD approximations based on Latvian Labour Force Survey and administrative data

24. It’s still early for an assessment of the
Youth Guarantee (I)
24
Some first positive trends emerge…
• distinct focus expanding career guidance and upskilling NEETs,
incl. strong expansion of second-chance ‘short-cycle’ VET options
 this is a promising approach especially in times of (still) weak labour
demand
• temporary public employment played an important role during the
crisis, but is slowly being phased out
 encouraging, given that there is little evidence for positive long-term
employment effects of such programmes
• increased financial support for mobility / accommodation of job
seekers
 important to boost opportunities of job seekers especially in rural areas

25. It’s still early for an assessment of the
Youth Guarantee (II)
25
… but important challenges remain:
• Administrative capacity and co-ordination remains low:
– integration of employment and social services is weak especially in
larger cities, and caseload numbers for counsellors tend to be high
 problematic especially for the most disadvantaged
• Programme participation needs to be raised further:
– In 2014, only 2 out of 3 registered job seekers participated in a
programme (and there are many unregistered NEETs…);
– there is evidence of creaming, as programmes are offered primarily to
more motivated job seekers;
• Extending outreach will be a challenge, especially in areas without
an existing local network of NGOs

26. OECD recommendations
26
Strengthen the integration of the employment and social services:
• closer co-operation and information exchange is needed to ensure
comprehensive support, especially for the most disadvantaged
• early profiling of benefit claimants can help reduce high caseload numbers
Tighten conditionality of income-support payments on active job-search or
programme participation for employable NEETs;
Ensure gate-keeping for disability benefits among youth
Continue phasing out the public employment programmes for youth
introduced during the crisis and consider expanding targeted hiring subsidies
Systematically implement the recently launched outreach stage of the Youth
Guarantee to link up inactive NEETs with social and employment services

27. 27
Contact: Sebastian.Koenigs@oecd.org
Access the Latvian review online: Investing in Youth – Latvia
More recent work on the youth policies: www.oecd.org/employment/action-plan-youth.htm
OECD Directorate for Employment, Labour and Social Affairs: www.oecd.org/els
In It Together: Why less Inequality benefits All: www.oecd.org/social/inequality-and-poverty.htm
Society at a Glance 2014: www.oecd.org/social/societyataglance.htm
Pensions at a Glance 2013: www.oecd.org/pensions/pensionsataglance.htm
Thank you
@OECD_Social