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Sebastian Königs
Economist
Directorate for Employment, Labour and Social Affairs
Investing in Youth
Latvia
Riga, 27 August...
• Young people in Latvia have been hit severely by the Great Recession.
Today, the share of young people not in employment...
Labour market outcomes
for youth in Latvia
The youth population has shrunk
dramatically over the last decade
Source: OECD calculations based on the Latvian Labour Fo...
Young people have been hit hard during
the economic crisis
1. Numbers are for individuals aged 15-29 years.
Source: OECD c...
Only few young people in Latvia combine
study and work
1. Statistics are for young people aged 15-29 years.
2. Results are...
Half of all NEETs in Latvia are not looking for
work, but this share has been declining
1. Statistics are for young people...
NEETs rates are much higher in Latgale and Zemgale,
which benefited little from the recovery
1. Statistics are for young p...
Who are those not in employment,
education or training (NEETs)?
NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-29 years.
2. Results are for 2013
So...
NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-29 years.
2. Results are for 2013
So...
NEETs are more likely than other youth to…
1. Results are for 2013
2. The term “low-educated” is used to describe individu...
NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-29 years.
2. Results are for 2013
So...
NEETs are more likely than other youth to…
1. Statistics are for young people aged 15-24 years.
2. Results are for 2008
So...
… and also NEETs’ parents tend to be more
disadvantaged
1. Statistics are for young people aged 16-29 years.
2. Numbers ar...
Periods out of education or work moreover tend to
be widespread and long in duration
16Results based on OECD calculations ...
Providing high-quality
vocational education and training
in Latvia
Vocational education in Latvia has suffered
from low attractiveness and high drop-out
18
• Latvia’s vocational education s...
Latvia has taken important steps to reform its
vocational education system
19
• consolidation of the network of vocational...
OECD recommendations
20
Expand work-based training in vocational education, ideally through
introduction of an apprentices...
Offering employment or training options
to NEETs in Latvia
The YG represents a great opportunity for
bringing NEETs back into education or work
22
• The Great Recession led to a mas...
In 2013, about 30% of NEETs were non-
registered without health or family reasons
23
Breakdown of NEETs by registration st...
It’s still early for an assessment of the
Youth Guarantee (I)
24
Some first positive trends emerge…
• distinct focus expan...
It’s still early for an assessment of the
Youth Guarantee (II)
25
… but important challenges remain:
• Administrative capa...
OECD recommendations
26
Strengthen the integration of the employment and social services:
• closer co-operation and inform...
27
Contact: Sebastian.Koenigs@oecd.org
Access the Latvian review online: Investing in Youth – Latvia
More recent work on t...
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Investing in youth latvia

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Investing in youth latvia

  1. 1. Sebastian Königs Economist Directorate for Employment, Labour and Social Affairs Investing in Youth Latvia Riga, 27 August 2015
  2. 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. 3. Labour market outcomes for youth in Latvia
  4. 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. 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. 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. 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. 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. 9. Who are those not in employment, education or training (NEETs)?
  10. 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. 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. 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. 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. 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. 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. 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. 17. Providing high-quality vocational education and training in Latvia
  18. 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. 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. 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. 21. Offering employment or training options to NEETs in Latvia
  22. 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. 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. 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. 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. 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. 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

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