Summary

Since 2007 with the development of a medium- and long-term labour market forecasting system, significant steps have been taken towards the development of a coherent approach to skills anticipation, with the support of the European Social Fund (ESF). Further funding provided by the ESF from 2010 to 2013 resulted in the development of a short-term labour demand forecasting methodology. Currently the medium- and long-term forecasting activities provide labour demand and supply forecasts by sector, occupation and educational attainment (level and field/discipline). Meanwhile, short-term quarterly employment forecasts are provided by sector and occupation at a regional level. The Ministry of Economics (Ekonomikas ministrija), the State Employment Agency (Nodarbinātības valsts aģentūra) – the Latvian public employment service (PES) – and the Ministry of Welfare (Labklājības ministrija) all play a role in skills forecasting activities.

Various stakeholders have an important role in the process of skills anticipation including those from the education system and employee and employer representatives. There are numerous committees, working groups and other bodies involved in dealing with issues related to the labour market and education provision that use the results from the forecasts. Other stakeholders, such as educational institutions, employees’ and employers’ organisations also contribute information into skills anticipation activities.

The main target audience of the forecasts are employment and education policymakers, the social partners, academics and other stakeholders. Information is disseminated to these groups through various means, including the State Employment Agency’s visualisation tool, websites of government ministries and agencies, and through the media. Measures to improve access to skills anticipation information are under development.

 

 

Please cite this document as: Skills Panorama (2017), Skills anticipation in Latvia. Analytical highlights series. Available at /en/analytical_highlights/skills-anticipation-latvia

Overview of the Latvian approach

Skills anticipation in Latvia 

Description

At the end of the 2000s policymakers recognised that, from a planning perspective, reliable forecasts of future employment levels were required. This led to the first study in the development of a forecasting system of labour market demand in 2007,(1) co-funded by the ESF and carried out under the supervision of the Ministry of Welfare. In 2008, forecasting duties were assumed by the Ministry of Economics. Since then, the Ministry of Economics has moved its focus on medium to long-term forecasting (from five to fifteen years) while the State Employment Agency, operating under the supervision of the Ministry of Welfare, tends to focus on short-term forecasting (e.g. looking six months ahead). Both forecasts primarily rely on Labour Force Survey (LFS) data; however data from national accounts, educational and employer surveys are also used. Most of the data necessary for labour market forecasting are provided by the Central Statistical Bureau (Centrālā Statistikas pārvalde). Skills anticipation is still undergoing development with a view to improving forecasting activities, more effectively and efficiently involving stakeholders such as the social partners, and disseminating the results to intended target groups. Forecasting capabilities have been developed so that forecasts are produced by occupation and education level with ESF funding (2010-2013).
With further funding from the ESF between 2014 and 2020 it is expected that skills forecasting will become more comprehensive and incorporate the following:

  • Better interlinking of the results from forecasting with policymaking;
  • Improving the methodology for short-term forecasting;
  • Improving the data collection from employers and using this data in short-term forecasting;
  • Improved dissemination of the results of skills anticipation to policymakers, social partners and other stakeholders.

Aims

The aim of skills anticipation, as indicated by the Ministry of Economics, is to develop a coordinated approach to forecasting skills demand and supply that can be used in employment, education, and social policymaking. It aims to provide a structured framework for discussions on labour market challenges and provide information to assist with developing responses to those challenges. (2)

There is relatively little regulation on skills anticipation. The National Development Plan 2014 - 2020 acknowledges the need for a tool that monitors trends in the labour market and forecasts future developments.

A Cabinet Protocol Decision (3) outlines the need for a forecasting tool and sets it as a function of the Ministry of Economics. The Ministry of Economics prepares a report every year on medium- and longer-term labour market forecasts (4) for approval by the Cabinet of Ministers (CM). The Decision also foresees that such a report is prepared on an annual basis. From 2017 the Ministry of Economics will prepare it biennially.

According to the 2016 CM Regulation (5) on the ‘Rules of implementation of the system of anticipating changes in the labour market’ the PES, in conjunction with the Ministry of Economics, will implement a project for the establishment of a comprehensive labour market anticipation system using forecasting methods.
The task to carry out short-term forecasting is defined in the Law on Support for Unemployed People and Jobseekers. Detailed procedures are described in the State Employment Agency’s internal circulars.

Governance

The Ministry of Economics shares policymaking activities relating to employment and skills with the Ministry of Welfare and the Ministry of Education and Science (Izglītības un zinātnes ministrija). The Ministry of Economics is in charge of medium- and long-term forecasting, but the State Employment Agency, supervised by the Ministry of Welfare, provides short-term forecasts of employment by occupation and education level.

The results of forecasts are presented to, and discussed with, the Ministry of Education and Science and the other main stakeholders. The Ministry of Economics has set up an advisory board to act as a coordinating and consultative body for labour market forecasting. The board is led by the Minister of Economics and involves all major labour market stakeholders, including representatives of the Ministry of Education and Science, the Ministry of Welfare, the State Employment Agency, Employers’ Confederation of Latvia, and the Free Trade Union Confederation.

The role of stakeholders

The leading ministries and the PES solicit advice from stakeholders and involve them in discussions on various projects linked to skills anticipation. In 2011, 12 Sectoral Experts Councils (Nozaru ekspertu padomes) were established by the ESF project, led by the State Education Development Agency (Valsts Izglītības attīstības aģentūra). One of their tasks is to contribute to labour market analysis and forecasting; however, their activities appear to have been reduced since the project ended in 2015. In total, there are more than 20 consultative boards, committees and working groups, which use the results of the forecasts and deal with the issues related to the labour market and education.

Over the past few years, the role of stakeholders has been outlined in the Educational Development Guidelines 2014-2020. (6) Overall, stakeholders are involved in advising upon the results of labour market forecasts and in using the latter to improve the legislative framework and the implementation of policy related to the provision of skills. The main stakeholder groups involved in these processes are employees’ and employers’ organisations, education and training organisations, and sectoral organisations (e.g. Latvian ICT association). Greater emphasis is placed by the government on stakeholder involvement in improving the provision of vocational education than higher education.

In July 2016, the Ministerial Council on Employment consisting three ministries (Ministry of Economy, Ministry of Welfare, and Ministry of Education and Science) was established. This signalled an acknowledgement for the need for a comprehensive and coordinated approach to anticipating labour market changes. The objective of the council is to foster discussions on key skills policy priorities, promote faster and more coherent interinstitutional cooperation and decision-making relevant to these priorities, and to plan and implement labour market reforms. The Council on Employment is seen as a first step in facilitating the wider involvement of policymakers, employers, sectoral experts as well as education and training providers in ensuring that the demands of the labour market are met.

The Vocational Education and Employment Tripartite Cooperation Sub-council works on promoting dialogue between employers and employees on training and employment issues. The Sub-council consists of the representatives from various ministries (Welfare, Economy, Finance, Justice, Agriculture, Education and Science, Environmental Protection and Regional Development), the Association of Free Trade Unions and the Confederation of Employers. It is an important stakeholder as it participates in the development of the occupational standards determining the curriculum and content of vocational education programmes.
The lists of in-demand occupations (and the demand for people with a certain level or field of education) prepared by the State Employment Agency are discussed in an inter-institutional commission headed by the Ministry of Welfare that includes the social partners, academics, and other stakeholders. The aim of the discussions is to improve training programmes offered to unemployed people as part of active labour market policy measures. The commission approves the list of occupations in which there is a shortage of skills supply.

Target groups

The main target groups for the labour market forecasts are policymakers, labour market intermediaries and individuals. (7) More specifically, the groups include:

  • The Ministry of Economics;
  • The Ministry of Welfare;
  • The State Employment Agency;
  • The Ministry of Education and Science;
  • The State Social Insurance Agency;
  • Employers’ Confederation of Latvia;
  • Free Trade Union Confederation of Latvia;
  • Latvian Chamber of Commerce and Industry (Latvijas Tirdnzniecības un rūpniecības kamera);
  • Educational institutions;
  • Employers and employees;
  • Young people making the transition from education to work;
  • Jobseekers;
  • Careers guidance counsellors.

Funding and resources

The development of skills anticipation is funded by the government and by the ESF. The labour market forecasts are carried out independently from EU funding, but the ESF plays a major role in the further development of activities and in implementing additional thematic research.

Methods and tools

Skills assessment

The Sectoral Experts Councils that were created in 2011 and consist in sectoral employers’ organisations and their associations, sectoral trade unions, the Ministry of Education and Science, and sectoral ministries.

These councils conduct skills assessments, for example on sectoral qualifications structures on an ad-hoc basis.

Skills forecasts

To produce skills forecasts (by occupation and education level) Latvia uses the Dynamic Optimisation Model, first developed in 2007 and extensively modified from 2010-2013 within the ESF co-funded project ‘Development of Medium term and Long Term Labour Market Demand Forecasting System’.
Following modifications, the labour market forecasting model used by the Ministry of Economics now consists the following three modules: (8)

  • Demand, which provides forecasts of sectoral employment demand based on macroeconomic scenarios related to future growth and productivity change;
  • Supply, provides a forecast of labour and skills supply based on demographic trends, trends in educational attainment (by age) and the occupations/previous occupations in which people worked (by age); and
  • Labour market, which is based on the outcomes of the supply and demand modules to give an indication of employment demand by occupation and education level.

These forecasts contain labour market prospects disaggregated by sector, occupation and education level. The aim of the medium- and long-term labour market forecasts is to provide insights into the changing structure of the labour market and support the development and planning of educational programmes.
In order to obtain short-term demand and supply forecasts, the State Employment Agency uses an econometric forecasting model, developed as part of the ESF’s ‘State Employment Agency’s labour market forecasting and monitoring system development’ project. Forecasts are reported twice a year and contain information on the future demand for people by occupation and education level, alongside an indication of skills mismatches, over the six months ahead. The aim of the short-term forecasts is to provide updated information about the most in-demand occupations and support the development of training programmes for both unemployed and employed people. The forecasts are subsequently enhanced by data from employer surveys and the LFS. The model provides forecasts by sector, (9) occupational groups, (10) regions (11), education level (12) and field of education. (13)

The creation of a new system of anticipation and management of labour market restructuring is in development (14) and is expected to provide more detailed information by occupation, sector and educational level to provide a more detailed insight into the country’s emerging skills needs.

Skills foresight

Skills foresight activities are not systematically undertaken. Such studies were undertaken within the project ‘Development of medium-term and long-term forecasting system for demand of labour market’ (2010-2013). Under this project, the Ministry of Economics carried out several thematic studies and sectoral surveys to obtain more information about the long-term development of the economy and the resulting demand of skills in various sectors. These studies supported the development of alternative future scenarios regarding the job market. Analysis was undertaken by assessing recent trends in economic development at national and global level. These studies also provided the basis for further discussions on key trends in skills demand and identification of areas for future research.

Other skills anticipation practices

As part of the short-term labour market forecasting process, the State Employment Agency has carried out employer surveys. These have been carried out under a project co-funded by the ESF and led by the State Education Development Agency in close cooperation with the Employers’ Confederation of Latvia, the Free Trade Union Confederation of Latvia, the National Centre for Education (15) and other partners and sectoral organisations. These surveys were carried out on the same regularity as the forecasts (i.e. twice a year from 2012-2014 as part of the ESF project). In 2015-2016 the employer survey was replaced by a survey of sectoral organisations, but may be re-introduced in the future.

Dissemination and use

Use of skills anticipation in policy

Ministries, national agencies and key stakeholders use skills anticipation data in the following ways:

  • The Ministry of Economics uses the forecasts for economic and sectoral policy planning.
  • The Ministry of Welfare uses forecasts in planning training for unemployed people.
  • The State Employment Agency uses short-term forecasts for deciding upon the provision of training programmes for jobseekers and assisting with career guidance and job searches.
  • The Ministry of Education and Science uses the forecasts for preparing and implementing education policy and in developing strategic development documents, including planning support to educational institutions.
  • The Free Trade Union Confederation of Latvia, and the Latvian Chamber of Commerce and Industry use the forecasts to assess the labour market conditions and to propose ideas for labour policy formation.

The medium- and long-term labour market forecasts serve as a quantitative base for further discussions between policymakers, social partners, academics and other stakeholders for anticipating structural changes in various economic sectors. Forecasts are published on the websites of the main ministries/agencies involved in their production and are presented and discussed during the meetings of various consultative boards, committees and working groups.
Even though the results of the labour market forecasts prepared by the Ministry of Economics and the Ministry of Welfare are regularly presented and discussed with the Ministry of Education, other institutions, social partners and experts, several weaknesses have been acknowledged in relation to the dissemination and use of the forecasts, namely:

  • Limited dissemination channels leading to lack of awareness in the society about changes in the labour market;
  • Lack of a general discussion about labour market trends and future skills needs; and
  • Lack of a coordination mechanism ensuring that the labour market forecasts are used in developing policy at the sectoral level.

To solve the problem of significant time lag between the production of forecast reports and the integration of their findings into education policy, the Ministry of Economics and the Ministry of Welfare are planning to implement new measures in the period up to 2020 that will include: more stakeholder involvement in discussing the implications of the forecasts for policy, streamline the number of working parties and committees that consider different aspects of the forecasts, improve dissemination channels (e.g. more online access) and increase the role of employers and regional authorities in discussions on labour market needs.

In addition to the ministries, wider stakeholders who are not involved in the design or implementation of skills anticipation activities hold a key role in the design of educational and employment policies. As such, they are informed by, and make use of, skills anticipation data. Nonetheless, stakeholder involvement in education-relevant policies is one of the key principles in the Education Development Guidelines 2014-2020. This advocates the promotion of partnerships and involvement of stakeholders in education processes. It is interesting to note that although stakeholders are involved in designing higher education offers, greater emphasis is placed on stakeholder cooperation to improve vocational education.

Target groups’ use of skills anticipation outputs

The main target groups for skills anticipation outputs are policymakers (government ministries and agencies). Additional target groups include job seekers, who may seek guidance in choosing a profession, and educational institutions which may use these outputs in educational programme planning. With the beginning of the 2014-2020 ESF planning period, there is greater emphasis on using the results from skills anticipation to assist young people in their decision-making on their future educational and professional paths.

The short-term forecasts of the State Employment Agency are available to PES staff and jobseekers through the electronic visualisation system. In this way, the decisions of jobseekers are informed by the results of the forecasting.

The medium- and long-term reports are available annually to the public on the Ministry of Economics’ webpage. As a result of the involvement of over 20 different councils, committees and working groups in dealing with education and labour market issues, there is no guarantee that the results of the forecasting are interpreted in a consistent way.
There have been some, albeit slightly limited, attempts to provide training and resources for career guidance practitioners in Latvia. Since 2012, career counsellors in the State Employment Agency have received data on labour needs in different sectors. Finally, within the envisaged developments of skills anticipation, a fully operational web based labour market analysis and intelligence platform is planned. (16)

 

Please cite this document as: Skills Panorama (2017), Skills anticipation in Latvia. Analytical highlights series. 
Available at /en/analytical_highlights/skills-anticipation-latvia

 

 

 

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Endnotes

(1) Development Project Institute of the University of Latvia (2007). Long Term Forecasting System of Labour Market Demand and Analysis of Improvement Opportunities. http://www.lm.gov.lv/upload/darba_tirgus/darba_tirgus/petijumi/ilgtermina_prognozesana.pdf

(2) Ministry of Economics (2016). An informative report on Medium and Longer-term Labour Market forecasts. Available at https://www.em.gov.lv/lv/nozares_politika/tautsaimniecibas_attistiba/informativais_zinojums_par_darba_tirgus_videja_un_ilgtermina_prognozem/

(3) No. 48 of 14 July 2009

(4) An informative report on Medium and Longer-term Labour Market forecasts

(5) No.126

(6) “A medium-term policy planning document that sets out the structure of the education sector development and prospects for the next seven years.” https://rio.jrc.ec.europa.eu/en/library/guidelines-development-education-2014-2020

(7) Ministry of Economics (2016). An informative report on Medium and Longer-term Labour Market forecasts.

(8) Ministry of Economics (2016). An informative report on Medium and Longer-term Labour Market forecasts.

(9) 15 sectors (NACE)

(10) At 3-digit level (127 occupations) consistent with ISCO-08

(11) Riga, Riga area, Kurzeme, Zemgale, Latgale, Vidzeme, Latvia

(12) Eight levels.

(13) 79 fields

(14) c.f. CM 126

(16) Ministry of Welfare (2015). 7.1.2.2.pasākuma, Darba tirgus apsteidzošo pārkārtojumu sistēmas ieviešana” sākotnējais novērtējums.