Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing
As a strong reformer among the Central and Eastern European Countries (CEEC), Latvia has recorded a dramatic economic improvement recent years, with relatively strong growth, increased investment rates, and clear signs of easing labor market condit...
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| Format: | Country Economic Memorandum |
| Language: | English en_US |
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Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/01/2877082/latvia-quest-jobs-growth-world-bank-country-economic-memorandum-vol-1-2 http://hdl.handle.net/10986/14678 |
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okr-10986-14678 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO INFORMATION ADVERSE CONSEQUENCES ADVERSE IMPACTS AGED AGING AGRICULTURE AUTHORITY BANKING SECTOR BUDGET DEFICIT CASH BENEFITS CENTRAL BANK CENTRAL GOVERNMENT CLIMATE COMPETITIVENESS CORRUPTION CYCLICAL UNEMPLOYMENT DECISION-MAKING DEMOGRAPHICS DISTRICTS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMIES OF SCALE EMPLOYMENT EQUILIBRIUM ETHNIC MINORITIES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORTS FAMILIES FISCAL FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FISCAL PRESSURE FISCAL STANCE FISCAL YEAR FOREIGN DIRECT INVESTMENT FREE TRADE GDP GDP PER CAPITA GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GOVERNMENT AGENCIES GOVERNMENT REVENUES GROSS DOMESTIC PRODUCT HIGH UNEMPLOYMENT HOUSING HUMAN CAPITAL IMPORTS INCOME INCOME GROUPS INCOME INEQUALITY INCOME LEVELS INCOME TAXES INFLATION INFLATION RATES INFORMAL SECTOR INSURANCE KNOWLEDGE ECONOMY LABOR FORCE LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MOBILITY LABOR PRODUCTIVITY LOCAL GOVERNMENT MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMICS MONETARY POLICIES MONETARY POLICY MUNICIPAL AGENCIES MUNICIPALITIES NATIONAL PLANNING NATIONS PENSIONS PER CAPITA INCOME PERSONAL INCOME TAXES POSITIVE EFFECTS POVERTY ALLEVIATION PRICE INCREASES PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PURCHASING POWER REAL GDP RETIREMENT SCHOOLS SOCIAL ASSISTANCE SOCIAL ASSISTANCE SYSTEM SOCIAL EXCLUSION SOCIAL INSURANCE SOCIAL POLICIES SOCIAL POLICY SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL PROTECTION SYSTEM SOCIAL SECURITY STATE-OWNED ENTERPRISES SUSTAINABLE GROWTH TAX BURDEN TAX COLLECTION TAX POLICY TAX RATE TAX REDUCTION TAX REVENUE TAX SYSTEM TAXATION TOTAL EXPENDITURES TOTAL FACTOR PRODUCTIVITY TRANSFER PAYMENTS TRANSPARENCY UNEMPLOYMENT UNEMPLOYMENT RATES WAGES WELFARE EFFECTS WORKERS WORKPLACE WORLD TRADE ORGANIZATION WTO COUNTRY ECONOMIC WORK UNEMPLOYMENT LEVELS JOB CREATION REFORM POLICY ECONOMIC GROWTH LABOR MARKET CHARACTERISTICS MACROECONOMIC STABILITY EXCHANGE RATE INDICATORS FISCAL POLICY PRUDENTIAL REGULATIONS STRUCTURAL REFORMS DEMOGRAPHIC STATISTICS INVESTMENT ENVIRONMENT TRANSPORTATION COSTS HOUSING MARKET RURAL INCOME SKILLED WORKERS KNOWLEDGE-BASE STRATEGIES SOCIAL PROGRAMS EUROPEAN UNION MEMBERSHIP TAX POLICY TRAINING PROGRAMS |
| spellingShingle |
ACCESS TO INFORMATION ADVERSE CONSEQUENCES ADVERSE IMPACTS AGED AGING AGRICULTURE AUTHORITY BANKING SECTOR BUDGET DEFICIT CASH BENEFITS CENTRAL BANK CENTRAL GOVERNMENT CLIMATE COMPETITIVENESS CORRUPTION CYCLICAL UNEMPLOYMENT DECISION-MAKING DEMOGRAPHICS DISTRICTS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMIES OF SCALE EMPLOYMENT EQUILIBRIUM ETHNIC MINORITIES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORTS FAMILIES FISCAL FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FISCAL PRESSURE FISCAL STANCE FISCAL YEAR FOREIGN DIRECT INVESTMENT FREE TRADE GDP GDP PER CAPITA GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GOVERNMENT AGENCIES GOVERNMENT REVENUES GROSS DOMESTIC PRODUCT HIGH UNEMPLOYMENT HOUSING HUMAN CAPITAL IMPORTS INCOME INCOME GROUPS INCOME INEQUALITY INCOME LEVELS INCOME TAXES INFLATION INFLATION RATES INFORMAL SECTOR INSURANCE KNOWLEDGE ECONOMY LABOR FORCE LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MOBILITY LABOR PRODUCTIVITY LOCAL GOVERNMENT MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMICS MONETARY POLICIES MONETARY POLICY MUNICIPAL AGENCIES MUNICIPALITIES NATIONAL PLANNING NATIONS PENSIONS PER CAPITA INCOME PERSONAL INCOME TAXES POSITIVE EFFECTS POVERTY ALLEVIATION PRICE INCREASES PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PURCHASING POWER REAL GDP RETIREMENT SCHOOLS SOCIAL ASSISTANCE SOCIAL ASSISTANCE SYSTEM SOCIAL EXCLUSION SOCIAL INSURANCE SOCIAL POLICIES SOCIAL POLICY SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL PROTECTION SYSTEM SOCIAL SECURITY STATE-OWNED ENTERPRISES SUSTAINABLE GROWTH TAX BURDEN TAX COLLECTION TAX POLICY TAX RATE TAX REDUCTION TAX REVENUE TAX SYSTEM TAXATION TOTAL EXPENDITURES TOTAL FACTOR PRODUCTIVITY TRANSFER PAYMENTS TRANSPARENCY UNEMPLOYMENT UNEMPLOYMENT RATES WAGES WELFARE EFFECTS WORKERS WORKPLACE WORLD TRADE ORGANIZATION WTO COUNTRY ECONOMIC WORK UNEMPLOYMENT LEVELS JOB CREATION REFORM POLICY ECONOMIC GROWTH LABOR MARKET CHARACTERISTICS MACROECONOMIC STABILITY EXCHANGE RATE INDICATORS FISCAL POLICY PRUDENTIAL REGULATIONS STRUCTURAL REFORMS DEMOGRAPHIC STATISTICS INVESTMENT ENVIRONMENT TRANSPORTATION COSTS HOUSING MARKET RURAL INCOME SKILLED WORKERS KNOWLEDGE-BASE STRATEGIES SOCIAL PROGRAMS EUROPEAN UNION MEMBERSHIP TAX POLICY TRAINING PROGRAMS World Bank Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing |
| geographic_facet |
Europe and Central Asia Latvia |
| description |
As a strong reformer among the Central
and Eastern European Countries (CEEC), Latvia has recorded a
dramatic economic improvement recent years, with relatively
strong growth, increased investment rates, and clear signs
of easing labor market conditions. A stabilization package
designed around a fixed exchange rate regime, and prudent
fiscal policies, as well as structural reforms, have yielded
good results, although the current account deficit is still
high, and the fiscal stance has deteriorated somewhat since
2001. Unemployment has declined from its peak of almost 21
percent in the mid-1990s, to about 12 percent in 2002. Since
2000, youth and the elderly have been more active in the
labor market, while prime age employment is on the rise.
Factors explaining the decline in unemployment include:
changes in demographics; stronger growth and investment;
and, progress in structural reforms. Yet, some substantial
problems remain and must be addressed. Migration and
commuting between regions are impaired by high
transportation costs and underdeveloped housing markets;
incomes are low in rural areas nationwide; Latvia's
labor force features a skills mismatch; taxes on labor use
are relatively high, which includes high contributions to
social programs; and, investors have raised concerns on
factors that would prevent the development of
knowledge-intensive sectors. Convergence to European Union
(EU) income levels will take time - Latvia's per capita
income stands only at about 33 percent of the EU average in
purchasing power standards. The 2000 European Council of
Lisbon set ambitious targets for raising employment rates in
the EU, though in the short to medium term, implementation
of the remaining policy agenda, could help Latvia meet the
Lisbon targets. Furthermore, as Latvia becomes a member of
the EU in May 2004, and prepares to adopt the euro, its
flexible labor market will be key for sustaining
macroeconomic performance, and accelerating convergence. The
report proposes pursuing sound macroeconomic policies to
further job creation; reducing informality: a lower tax
burden on labor use is likely to have a fiscal cost in the
short term, but this must be weighed against the potentially
great positive effects of attracting business to the formal
sector; thus, pursuing structural reforms to continue
attracting foreign direct investment; improving skills for
low-wage, unskilled workers through training programs, and
the acceleration of reforms in the education sector.
Finally, within the social sectors recommendations suggest
changing the composition of social protection spending to
improve social assistance benefits for poor families, while
improving the rates of receipt of transfer payments across
social groups. |
| format |
Economic & Sector Work :: Country Economic Memorandum |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing |
| title_short |
Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing |
| title_full |
Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing |
| title_fullStr |
Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing |
| title_full_unstemmed |
Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing |
| title_sort |
latvia - the quest for jobs and growth : a world bank country economic memorandum, volume 1. policy briefing |
| publisher |
Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/01/2877082/latvia-quest-jobs-growth-world-bank-country-economic-memorandum-vol-1-2 http://hdl.handle.net/10986/14678 |
| _version_ |
1764428395403280384 |
| spelling |
okr-10986-146782021-04-23T14:03:17Z Latvia - The Quest for Jobs and Growth : A World Bank Country Economic Memorandum, Volume 1. Policy Briefing World Bank ACCESS TO INFORMATION ADVERSE CONSEQUENCES ADVERSE IMPACTS AGED AGING AGRICULTURE AUTHORITY BANKING SECTOR BUDGET DEFICIT CASH BENEFITS CENTRAL BANK CENTRAL GOVERNMENT CLIMATE COMPETITIVENESS CORRUPTION CYCLICAL UNEMPLOYMENT DECISION-MAKING DEMOGRAPHICS DISTRICTS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMIES OF SCALE EMPLOYMENT EQUILIBRIUM ETHNIC MINORITIES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORTS FAMILIES FISCAL FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FISCAL PRESSURE FISCAL STANCE FISCAL YEAR FOREIGN DIRECT INVESTMENT FREE TRADE GDP GDP PER CAPITA GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GOVERNMENT AGENCIES GOVERNMENT REVENUES GROSS DOMESTIC PRODUCT HIGH UNEMPLOYMENT HOUSING HUMAN CAPITAL IMPORTS INCOME INCOME GROUPS INCOME INEQUALITY INCOME LEVELS INCOME TAXES INFLATION INFLATION RATES INFORMAL SECTOR INSURANCE KNOWLEDGE ECONOMY LABOR FORCE LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MOBILITY LABOR PRODUCTIVITY LOCAL GOVERNMENT MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMICS MONETARY POLICIES MONETARY POLICY MUNICIPAL AGENCIES MUNICIPALITIES NATIONAL PLANNING NATIONS PENSIONS PER CAPITA INCOME PERSONAL INCOME TAXES POSITIVE EFFECTS POVERTY ALLEVIATION PRICE INCREASES PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PURCHASING POWER REAL GDP RETIREMENT SCHOOLS SOCIAL ASSISTANCE SOCIAL ASSISTANCE SYSTEM SOCIAL EXCLUSION SOCIAL INSURANCE SOCIAL POLICIES SOCIAL POLICY SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL PROTECTION SYSTEM SOCIAL SECURITY STATE-OWNED ENTERPRISES SUSTAINABLE GROWTH TAX BURDEN TAX COLLECTION TAX POLICY TAX RATE TAX REDUCTION TAX REVENUE TAX SYSTEM TAXATION TOTAL EXPENDITURES TOTAL FACTOR PRODUCTIVITY TRANSFER PAYMENTS TRANSPARENCY UNEMPLOYMENT UNEMPLOYMENT RATES WAGES WELFARE EFFECTS WORKERS WORKPLACE WORLD TRADE ORGANIZATION WTO COUNTRY ECONOMIC WORK UNEMPLOYMENT LEVELS JOB CREATION REFORM POLICY ECONOMIC GROWTH LABOR MARKET CHARACTERISTICS MACROECONOMIC STABILITY EXCHANGE RATE INDICATORS FISCAL POLICY PRUDENTIAL REGULATIONS STRUCTURAL REFORMS DEMOGRAPHIC STATISTICS INVESTMENT ENVIRONMENT TRANSPORTATION COSTS HOUSING MARKET RURAL INCOME SKILLED WORKERS KNOWLEDGE-BASE STRATEGIES SOCIAL PROGRAMS EUROPEAN UNION MEMBERSHIP TAX POLICY TRAINING PROGRAMS As a strong reformer among the Central and Eastern European Countries (CEEC), Latvia has recorded a dramatic economic improvement recent years, with relatively strong growth, increased investment rates, and clear signs of easing labor market conditions. A stabilization package designed around a fixed exchange rate regime, and prudent fiscal policies, as well as structural reforms, have yielded good results, although the current account deficit is still high, and the fiscal stance has deteriorated somewhat since 2001. Unemployment has declined from its peak of almost 21 percent in the mid-1990s, to about 12 percent in 2002. Since 2000, youth and the elderly have been more active in the labor market, while prime age employment is on the rise. Factors explaining the decline in unemployment include: changes in demographics; stronger growth and investment; and, progress in structural reforms. Yet, some substantial problems remain and must be addressed. Migration and commuting between regions are impaired by high transportation costs and underdeveloped housing markets; incomes are low in rural areas nationwide; Latvia's labor force features a skills mismatch; taxes on labor use are relatively high, which includes high contributions to social programs; and, investors have raised concerns on factors that would prevent the development of knowledge-intensive sectors. Convergence to European Union (EU) income levels will take time - Latvia's per capita income stands only at about 33 percent of the EU average in purchasing power standards. The 2000 European Council of Lisbon set ambitious targets for raising employment rates in the EU, though in the short to medium term, implementation of the remaining policy agenda, could help Latvia meet the Lisbon targets. Furthermore, as Latvia becomes a member of the EU in May 2004, and prepares to adopt the euro, its flexible labor market will be key for sustaining macroeconomic performance, and accelerating convergence. The report proposes pursuing sound macroeconomic policies to further job creation; reducing informality: a lower tax burden on labor use is likely to have a fiscal cost in the short term, but this must be weighed against the potentially great positive effects of attracting business to the formal sector; thus, pursuing structural reforms to continue attracting foreign direct investment; improving skills for low-wage, unskilled workers through training programs, and the acceleration of reforms in the education sector. Finally, within the social sectors recommendations suggest changing the composition of social protection spending to improve social assistance benefits for poor families, while improving the rates of receipt of transfer payments across social groups. 2013-07-30T22:08:52Z 2013-07-30T22:08:52Z 2004-01-09 http://documents.worldbank.org/curated/en/2004/01/2877082/latvia-quest-jobs-growth-world-bank-country-economic-memorandum-vol-1-2 http://hdl.handle.net/10986/14678 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Economic & Sector Work :: Country Economic Memorandum Economic & Sector Work Europe and Central Asia Latvia |