Social Policies
#32Key Findings
With a mixed safety-net record, Latvia scores relatively poorly overall (rank 32) with regard to social policies. Its score on this measure has improved by 0.1 point relative to 2014.
Education reform has been a focus in recent years, with new curricula gradually being introduced. Spending on the sector is low, but increasing. The number of institutions and study programs in the higher-education sector remains unsustainably high. A small guaranteed minimum income has been increased following court rulings.
The healthcare sector is underfunded. Only about 60% of costs are covered by public schemes. Parental-leave benefits are generous, and the employment rate among women is above the EU average. Access to kindergartens is difficult, with families often waiting years for a place.
Pension benefits are low, with retiree poverty a serious problem. Integration policies for migrants and undeveloped. Automatic citizenship has been granted to children of the long-term residents who were not naturalized after independence from the Soviet Union. Crime rates are low.
Education reform has been a focus in recent years, with new curricula gradually being introduced. Spending on the sector is low, but increasing. The number of institutions and study programs in the higher-education sector remains unsustainably high. A small guaranteed minimum income has been increased following court rulings.
The healthcare sector is underfunded. Only about 60% of costs are covered by public schemes. Parental-leave benefits are generous, and the employment rate among women is above the EU average. Access to kindergartens is difficult, with families often waiting years for a place.
Pension benefits are low, with retiree poverty a serious problem. Integration policies for migrants and undeveloped. Automatic citizenship has been granted to children of the long-term residents who were not naturalized after independence from the Soviet Union. Crime rates are low.
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To what extent does education policy deliver high-quality, equitable and efficient education and training?
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Education policy fully achieves the criteria.
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Education policy largely achieves the criteria.
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Education policy partially achieves the criteria.
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Education policy does not achieve the criteria at all.
Latvia has a relatively well-educated population and performs reasonably well in international comparisons, such as PISA. The 2018 PISA results show that performance in the most significant indicators is at the OECD average or below average. Latvia is also successful in making secondary education nearly universal – 88% of adults aged 25-64 have completed upper secondary education, which is higher than the OECD average of 78%. At the same time, Latvia lags behind other OECD countries in the area of vocational education.
While 39.3% of the population aged 25-34 had higher education in 2019, a wide gender gap exists, with 51.1% of women and only 28% of men holding a tertiary-level qualification. Furthermore, among 25- to 64-year-olds, 34% of the population had attained tertiary education in 2018, 3% lower than the OECD average.
The IMF has warned that the Latvian higher education system is unsustainable due to a disproportionately high number of institutions, limited financing and falling student numbers. In 2017, the Bank of Latvia recommended a drastic reduction in the number of higher-education institutions, from 56 to 20, as well as a reduction in the number of study programs, from over 900 to less than 500. In 2017 the Riga Pedagogical Academy was merged with the University of Latvia, but since then the number of higher education institutions has stayed unchanged.
Latvia has undertaken comprehensive reforms in both general and vocational education, switching to a competency-based educational approach. From September 2020, schools have started to gradually introduce curricula that are in accordance with new standards.
In general, education reform has been high on the government’s agenda. Nevertheless, there are still challenges to address in the education system – a shrinking population, a high rate of early retirement among teachers, and a level of public funding that is significantly lower than the OECD average. There are also equity concerns regarding students in rural schools, as emigration and urbanization have contributed to geographic inequalities in educational access, engagement and quality.
Furthermore, Latvia’s spending on primary school teachers is near the OECD’s lowest on a per-pupil basis, mostly due to lower-than-average teacher salaries and shorter instruction time. From September 2019, the minimum salary for teachers increased to €750, and it increased further to €900 in 2022.
Citations:
1. OECD (2019) PISA 2018: Insights and Interpretations, Available at: https://www.oecd.org/pisa/PISA%202018%20Insights%20and%20Interpretations%20FINAL%20PDF.pdf, Last accessed: 07.01.2022.
2. Central Statistical Bureau of Latvia (2021), Education Statistics, Available (in Latvian) at: https://www.csp.gov.lv/lv/izglitiba?utm_source=https%3A%2F%2Fwww.google.com%2F, Last accessed: 03.01.2022.
3. Ministry of Education and Science (2021) Overview: Latvian Higher Education in 200 (Key Statistics), Available at: https://www.izm.gov.lv/lv/media/12842/download, Last accessed: 13.01.2022.
4. Eurydice (2021) National Reforms in School Education, Available at: https://eacea.ec.europa.eu/national-policies/eurydice/content/national-reforms-school-education-34_en, Last accessed: 07.01.2022.
5. OECD (2019), Education at a Glance: Latvia, Available at: https://www.oecd.org/education/education-at-a-glance/EAG2019_CN_LVA.pdf, Last accessed: 07.01.2022.
6. OECD (2020) Education Policy Outlook: Latvia, Available at: https://www.oecd.org/education/policy-outlook/country-profile-Latvia-2020.pdf, Last accessed: 05.01.2022.
7. IMF (2013) Republic of Latvia: Selected Issues, Available at: https://www.elibrary.imf.org/view/journals/002/2013/029/article-A002-en.xml, Last accessed: 07.01.2022.
While 39.3% of the population aged 25-34 had higher education in 2019, a wide gender gap exists, with 51.1% of women and only 28% of men holding a tertiary-level qualification. Furthermore, among 25- to 64-year-olds, 34% of the population had attained tertiary education in 2018, 3% lower than the OECD average.
The IMF has warned that the Latvian higher education system is unsustainable due to a disproportionately high number of institutions, limited financing and falling student numbers. In 2017, the Bank of Latvia recommended a drastic reduction in the number of higher-education institutions, from 56 to 20, as well as a reduction in the number of study programs, from over 900 to less than 500. In 2017 the Riga Pedagogical Academy was merged with the University of Latvia, but since then the number of higher education institutions has stayed unchanged.
Latvia has undertaken comprehensive reforms in both general and vocational education, switching to a competency-based educational approach. From September 2020, schools have started to gradually introduce curricula that are in accordance with new standards.
In general, education reform has been high on the government’s agenda. Nevertheless, there are still challenges to address in the education system – a shrinking population, a high rate of early retirement among teachers, and a level of public funding that is significantly lower than the OECD average. There are also equity concerns regarding students in rural schools, as emigration and urbanization have contributed to geographic inequalities in educational access, engagement and quality.
Furthermore, Latvia’s spending on primary school teachers is near the OECD’s lowest on a per-pupil basis, mostly due to lower-than-average teacher salaries and shorter instruction time. From September 2019, the minimum salary for teachers increased to €750, and it increased further to €900 in 2022.
Citations:
1. OECD (2019) PISA 2018: Insights and Interpretations, Available at: https://www.oecd.org/pisa/PISA%202018%20Insights%20and%20Interpretations%20FINAL%20PDF.pdf, Last accessed: 07.01.2022.
2. Central Statistical Bureau of Latvia (2021), Education Statistics, Available (in Latvian) at: https://www.csp.gov.lv/lv/izglitiba?utm_source=https%3A%2F%2Fwww.google.com%2F, Last accessed: 03.01.2022.
3. Ministry of Education and Science (2021) Overview: Latvian Higher Education in 200 (Key Statistics), Available at: https://www.izm.gov.lv/lv/media/12842/download, Last accessed: 13.01.2022.
4. Eurydice (2021) National Reforms in School Education, Available at: https://eacea.ec.europa.eu/national-policies/eurydice/content/national-reforms-school-education-34_en, Last accessed: 07.01.2022.
5. OECD (2019), Education at a Glance: Latvia, Available at: https://www.oecd.org/education/education-at-a-glance/EAG2019_CN_LVA.pdf, Last accessed: 07.01.2022.
6. OECD (2020) Education Policy Outlook: Latvia, Available at: https://www.oecd.org/education/policy-outlook/country-profile-Latvia-2020.pdf, Last accessed: 05.01.2022.
7. IMF (2013) Republic of Latvia: Selected Issues, Available at: https://www.elibrary.imf.org/view/journals/002/2013/029/article-A002-en.xml, Last accessed: 07.01.2022.
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To what extent does social policy prevent exclusion and decoupling from society?
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Policies very effectively enable societal inclusion and ensure equal opportunities.
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For the most part, policies enable societal inclusion effectively and ensure equal opportunities.
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For the most part, policies fail to prevent societal exclusion effectively and ensure equal opportunities.
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Policies exacerbate unequal opportunities and exclusion from society.
In 2019, 26% of the population or 489,000 people were at risk of poverty or social exclusion in Latvia, which is the lowest level in recent years. Although since 2010, the proportion of the population at risk of poverty or social exclusion has fallen by 14.1 percentage points, Latvia is still one of the poorest EU member states. In 2019, Latvia had the fifth-highest proportion of the population at risk of poverty or social exclusion (26%) among the EU member states.
In terms of social exclusion, the Latvian population is most affected by low income and its uneven distribution. Of the 26% of people that are exposed to social exclusion risks, the majority (21.6%) are exposed specifically to poverty.
The goal set in the Latvian National Reform Program was to decrease the number of people living at the risk of poverty to 21% by 2020. Until 2013, there was steady progress toward this goal, and in 2011 and 2012 it was almost achieved. However, with increasing income inequality, there was an increase in the proportion of the population at risk of poverty between 2013 and 2017. From 2017 onward, the share of those at risk of poverty and social exclusion increased again, reaching 26% in 2019.
The guaranteed minimum income (GMI) benefit was increased to €64 per month in 2020. This was challenged at the Constitutional Court of Latvia the same year, with litigants contending that the rate was inadequately low (as the monthly cost of living and the poverty threshold was €409 in 2018). The court ruled that it was necessary to ensure basic conditions of life, and that this amount did not comply with the constitution. In 2021, the GMI benefit was increased to €109 as a result.
The government has taken steps to decrease inequality. For example, in 2017, a new progressive tax rate was adopted (effective in 2018), along with other measures aimed at reducing the tax burden on low-wage earners. Similarly, the minimum levels of the retirement and disability pensions were increased in 2021, and the minimum wage was increased from €430 to €500 in 2021.
Nevertheless, even though living standards have improved overall, and expenditure on pensions and benefits continue to grow gradually, poverty and income equality remain high. Latvia’s poverty rate is one of the highest in the European Union and OECD. In addition, regional disparities in income per capita are notable. Social protection spending is below the European average, and areas such as housing and social exclusion remain underfunded.
Citations:
1. Central Statistical Bureau of Latvia (2021) Statistical Yearbook of Latvia, Available at: https://www.csb.gov.lv/en/statistics/statistics-by-theme/social-conditions/poverty/search-in-theme/433-people-risk-poverty-and-social-exclusion, Last accessed: 07.01.2022.
2. Official Gazette ‘Latvijas Vestnesis’ (2021) Social Change in 2021, Available at: https://lvportals.lv/skaidrojumi/323238-izmainas-socialaja-joma-2021-gada-2020, Last accessed: 07.01.2022.
3. Constitutional Court of Latvia (2020) The norm that sets the defined guaranteed minimum income level is incompatible with Article 1 and Article 109 of the Satversme, Available at: https://www.satv.tiesa.gov.lv/en/press-release/the-norm-that-sets-the-defined-guaranteed-minimum-income-level-is-incompatible-with-article-1-and-article-109-of-the-satversme/, Last accessed: 07.01.2022.
4. The World Bank (2019) Scientific research: Latvia: “Who is Unemployed, Inactive or Needy? Assessing Post-Crisis Policy Options”: Latvia GMI Program: Main Design Characteristics and Comparison with Minimum Income Schemes in Other EU Member States, Available at: https://www.lm.gov.lv/lv/media/5818/download, Last assessed 07.01.2022
5. Cabinet of Ministers (2019) Plan for the Improvement of the Minimum Income Support Framework for 2020-2021, Available (in Latvian): https://likumi.lv/ta/id/308914-par-planu-minimalo-ienakumu-atbalsta-sistemas-pilnveidosanai-2020-2021-gadam, Last assessed 07.01.2022.
In terms of social exclusion, the Latvian population is most affected by low income and its uneven distribution. Of the 26% of people that are exposed to social exclusion risks, the majority (21.6%) are exposed specifically to poverty.
The goal set in the Latvian National Reform Program was to decrease the number of people living at the risk of poverty to 21% by 2020. Until 2013, there was steady progress toward this goal, and in 2011 and 2012 it was almost achieved. However, with increasing income inequality, there was an increase in the proportion of the population at risk of poverty between 2013 and 2017. From 2017 onward, the share of those at risk of poverty and social exclusion increased again, reaching 26% in 2019.
The guaranteed minimum income (GMI) benefit was increased to €64 per month in 2020. This was challenged at the Constitutional Court of Latvia the same year, with litigants contending that the rate was inadequately low (as the monthly cost of living and the poverty threshold was €409 in 2018). The court ruled that it was necessary to ensure basic conditions of life, and that this amount did not comply with the constitution. In 2021, the GMI benefit was increased to €109 as a result.
The government has taken steps to decrease inequality. For example, in 2017, a new progressive tax rate was adopted (effective in 2018), along with other measures aimed at reducing the tax burden on low-wage earners. Similarly, the minimum levels of the retirement and disability pensions were increased in 2021, and the minimum wage was increased from €430 to €500 in 2021.
Nevertheless, even though living standards have improved overall, and expenditure on pensions and benefits continue to grow gradually, poverty and income equality remain high. Latvia’s poverty rate is one of the highest in the European Union and OECD. In addition, regional disparities in income per capita are notable. Social protection spending is below the European average, and areas such as housing and social exclusion remain underfunded.
Citations:
1. Central Statistical Bureau of Latvia (2021) Statistical Yearbook of Latvia, Available at: https://www.csb.gov.lv/en/statistics/statistics-by-theme/social-conditions/poverty/search-in-theme/433-people-risk-poverty-and-social-exclusion, Last accessed: 07.01.2022.
2. Official Gazette ‘Latvijas Vestnesis’ (2021) Social Change in 2021, Available at: https://lvportals.lv/skaidrojumi/323238-izmainas-socialaja-joma-2021-gada-2020, Last accessed: 07.01.2022.
3. Constitutional Court of Latvia (2020) The norm that sets the defined guaranteed minimum income level is incompatible with Article 1 and Article 109 of the Satversme, Available at: https://www.satv.tiesa.gov.lv/en/press-release/the-norm-that-sets-the-defined-guaranteed-minimum-income-level-is-incompatible-with-article-1-and-article-109-of-the-satversme/, Last accessed: 07.01.2022.
4. The World Bank (2019) Scientific research: Latvia: “Who is Unemployed, Inactive or Needy? Assessing Post-Crisis Policy Options”: Latvia GMI Program: Main Design Characteristics and Comparison with Minimum Income Schemes in Other EU Member States, Available at: https://www.lm.gov.lv/lv/media/5818/download, Last assessed 07.01.2022
5. Cabinet of Ministers (2019) Plan for the Improvement of the Minimum Income Support Framework for 2020-2021, Available (in Latvian): https://likumi.lv/ta/id/308914-par-planu-minimalo-ienakumu-atbalsta-sistemas-pilnveidosanai-2020-2021-gadam, Last assessed 07.01.2022.
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To what extent do health care policies provide high-quality, inclusive and cost-efficient health care?
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Health care policy achieves the criteria fully.
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Health care policy achieves the criteria largely.
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Health care policy achieves the criteria partly.
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Health care policy does not achieve the criteria at all.
The healthcare system in Latvia broadly delivers effective and efficient care considering its severe underfunding and a higher level of demand compared to most OECD countries. Life expectancy remains low in Latvia compared to other EU countries, mainly due to low public spending on health, issues with the accessibility of care and the high prevalence of behavioral risk factors.
The national health system (NHS) in Latvia is subject to strong government oversight and offers universal coverage of the population, a general tax-financed provision of healthcare, and a purchaser-provider split. However, only 61% of total healthcare expenditure came from public funding sources in 2019, which is a considerably lower proportion than the average for the EU (80%). The system as a whole remains underfunded.
In terms of access, 4.3% of the population reported having forgone medical care in 2019 due to costs, travel distances or waiting times. This is above the EU average of 1.7 %. In addition, as far as the hospital system is concerned, much remains to be desired with regard to the quality and efficiency of the services. For example, Latvia’s 30-day mortality rate after admission to hospital for a heart attack is the highest in the European Union, and is twice the EU average.
Since 2018, medical staff salaries have increased, on average, between 10% to 20% annually. In 2019, the average monthly salary among doctors was €2,003, and the current government plan foresees further wage increases, reaching a target salary of €3,833 in 2027.
Even though health expenditure per capita has increased by 75% since 2010, the OECD has noted that this level remains the fourth-lowest in the EU, and only 61% of health expenditure is publicly funded, which makes the share of out-of-pocket spending the second-highest in the EU.
The Ministry of Health has put strategic emphasis on prevention and health promotion. The National Action Plan on the Consumption of Alcoholic Beverages and Limitation of Alcoholism 2020-2022 is an example of this. However, the overall lack of resources has limited the effectiveness of these efforts.
Citations:
1. OECD (2021) State of Health in the Eu: Latvia Country Health Profile, Available at: https://www.oecd-ilibrary.org/docserver/919f55f0-en.pdf?expires=1642111674&id=id&accname=guest&checksum=082AC471401A19C0D0F04B0DD8DB190B, Last accessed: 07.01.2022.
2. Ministry of Health (2021) New model of medical staff remuneration, Available at (in Latvian): https://www.vm.gov.lv/lv/jaunais-mediku-atalgojuma-modelis, Last accessed: 13.01.2022.
3. OECD (2019) Health at a Glance: OECD Indicators, Available at: https://www.oecd-ilibrary.org/social-issues-migration-health/health-at-a-glance-2019_4dd50c09-en, Last assessed: 07.01.2022.
4. OECD (2019) OECD Economic Surveys: Latvia, Available at: https://www.oecd.org/economy/surveys/Latvia-2019-OECD-economic-survey-overview.pdf, Last assessed: 07.01.2022.
5. IMF (2018) Republic of Latvia: Selected Issues, Available at: https://www.imf.org/en/Publications/CR/Issues/2018/09/05/Republic-of-Latvia-Selected-Issues-46207, Last assessed: 07.01.2022.
6. OECD (2016). OECD Reviews of Health Systems.Latvia 2016. OECD Publishing, Paris. Available at: https://www.oecd.org/els/health-systems/oecd-reviews-of-health-systems-latvia-2016-9789264262782-en.htm, Last assessed: 07.01.2022.
The national health system (NHS) in Latvia is subject to strong government oversight and offers universal coverage of the population, a general tax-financed provision of healthcare, and a purchaser-provider split. However, only 61% of total healthcare expenditure came from public funding sources in 2019, which is a considerably lower proportion than the average for the EU (80%). The system as a whole remains underfunded.
In terms of access, 4.3% of the population reported having forgone medical care in 2019 due to costs, travel distances or waiting times. This is above the EU average of 1.7 %. In addition, as far as the hospital system is concerned, much remains to be desired with regard to the quality and efficiency of the services. For example, Latvia’s 30-day mortality rate after admission to hospital for a heart attack is the highest in the European Union, and is twice the EU average.
Since 2018, medical staff salaries have increased, on average, between 10% to 20% annually. In 2019, the average monthly salary among doctors was €2,003, and the current government plan foresees further wage increases, reaching a target salary of €3,833 in 2027.
Even though health expenditure per capita has increased by 75% since 2010, the OECD has noted that this level remains the fourth-lowest in the EU, and only 61% of health expenditure is publicly funded, which makes the share of out-of-pocket spending the second-highest in the EU.
The Ministry of Health has put strategic emphasis on prevention and health promotion. The National Action Plan on the Consumption of Alcoholic Beverages and Limitation of Alcoholism 2020-2022 is an example of this. However, the overall lack of resources has limited the effectiveness of these efforts.
Citations:
1. OECD (2021) State of Health in the Eu: Latvia Country Health Profile, Available at: https://www.oecd-ilibrary.org/docserver/919f55f0-en.pdf?expires=1642111674&id=id&accname=guest&checksum=082AC471401A19C0D0F04B0DD8DB190B, Last accessed: 07.01.2022.
2. Ministry of Health (2021) New model of medical staff remuneration, Available at (in Latvian): https://www.vm.gov.lv/lv/jaunais-mediku-atalgojuma-modelis, Last accessed: 13.01.2022.
3. OECD (2019) Health at a Glance: OECD Indicators, Available at: https://www.oecd-ilibrary.org/social-issues-migration-health/health-at-a-glance-2019_4dd50c09-en, Last assessed: 07.01.2022.
4. OECD (2019) OECD Economic Surveys: Latvia, Available at: https://www.oecd.org/economy/surveys/Latvia-2019-OECD-economic-survey-overview.pdf, Last assessed: 07.01.2022.
5. IMF (2018) Republic of Latvia: Selected Issues, Available at: https://www.imf.org/en/Publications/CR/Issues/2018/09/05/Republic-of-Latvia-Selected-Issues-46207, Last assessed: 07.01.2022.
6. OECD (2016). OECD Reviews of Health Systems.Latvia 2016. OECD Publishing, Paris. Available at: https://www.oecd.org/els/health-systems/oecd-reviews-of-health-systems-latvia-2016-9789264262782-en.htm, Last assessed: 07.01.2022.
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To what extent do family support policies enable women to combine parenting with participation in the labor market?
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Family support policies effectively enable women to combine parenting with employment.
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Family support policies provide some support for women who want to combine parenting and employment.
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Family support policies provide only few opportunities for women who want to combine parenting and employment.
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Family support policies force most women to opt for either parenting or employment.
Family-support policies enable women to combine parenting with participation in the labor market. In 2018, 72.7% of mothers with at least one child aged six and under were employed, which is above the EU average (63.1%). In addition, labor law prohibits an employer from terminating an employment contract with a pregnant woman or a mother with a baby under one year old.
A maximum of 112 calendar days of paid maternity leave can be taken, with mothers receiving 80% of their average wage. Paternity benefits are paid for a maximum 10 days at 80% of fathers’ average wage, with paternity leave taken within two months of the child’s birth.
Furthermore, parental leave of up to 18 months per child can be used by either parent prior to the child’s eighth birthday. Parents with three or more children are entitled to three extra days of paid leave per year, as well as other social benefits such as reduced fares on public transport. As of 2017, 10 days of parental leave are available to parents of adopted children.
Finally, access to kindergartens remains a problem, with families often waiting years for a place. Local government support for private sector involvement in childcare should address the shortage of available kindergarten places.
Citations:
1. European Commission (2018), Employment Rates by Sex: Reconciliation between work and family life, Available at: https://ec.europa.eu/eurostat/web/lfs/data/database, Last accessed: 03.01.2022
2. The State Social Insurance Agency (2021) Maternity Benefit, Available at: https://www.vsaa.gov.lv/en/services/maternity-benefits, Last accessed; 03.01.2022.
A maximum of 112 calendar days of paid maternity leave can be taken, with mothers receiving 80% of their average wage. Paternity benefits are paid for a maximum 10 days at 80% of fathers’ average wage, with paternity leave taken within two months of the child’s birth.
Furthermore, parental leave of up to 18 months per child can be used by either parent prior to the child’s eighth birthday. Parents with three or more children are entitled to three extra days of paid leave per year, as well as other social benefits such as reduced fares on public transport. As of 2017, 10 days of parental leave are available to parents of adopted children.
Finally, access to kindergartens remains a problem, with families often waiting years for a place. Local government support for private sector involvement in childcare should address the shortage of available kindergarten places.
Citations:
1. European Commission (2018), Employment Rates by Sex: Reconciliation between work and family life, Available at: https://ec.europa.eu/eurostat/web/lfs/data/database, Last accessed: 03.01.2022
2. The State Social Insurance Agency (2021) Maternity Benefit, Available at: https://www.vsaa.gov.lv/en/services/maternity-benefits, Last accessed; 03.01.2022.
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To what extent does pension policy realize goals of poverty prevention, intergenerational equity and fiscal sustainability?
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Pension policy achieves the objectives fully.
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Pension policy achieves the objectives largely.
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Pension policy achieves the objectives partly.
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Pension policy does not achieve the objectives at all.
The state pension system guarantees a monthly minimum pension. In 2020, this amount was increased from €64 to €80. However, Latvia’s Ombudsman approached the Constitutional Court later the same year with a claim that such an amount cannot meet the basic needs of the pensioner and ensure a dignified life, and was thus unconstitutional. The Court ruled that the minimum amount of €80 did not comply with the constitution, and it was consequently raised to €109 in 2021.
The average monthly pension in 2020 was €367.05. According to the Central Statistics Bureau, the at-risk-of-poverty rate among citizens aged 65 and over grew rapidly from 2012 (17.6%) to 2018 (47.9%). While the situation improved slightly in 2019, with 40.9% of the elderly being at risk, it still remains the most vulnerable age group in Latvia.
Two types of mandatory pension schemes exist in Latvia: a non-financial (notional) contribution (pay-as-you-go) and a funded contribution. There are also voluntary private pension funds that are complementary to the mandatory schemes. Jointly, these constitute a three-pillar pension system, which has increased the system’s fiscal sustainability and intergenerational equity.
The second pillar mandatory funded pension scheme has come under criticism for excessive fees. An independent private startup fund has emerged, offering substantially lower commissions and favorable terms. Legislators have taken interest and draft legislation is under consideration as of 2018 to limit bank commissions and fees levied for managing the mandatory funded pension scheme.
In a 2018 report, the OECD criticized Latvia’s three-pillar system and specifically the NDC schemes, because they automatically adjust to changes in the size of the labor force and life expectancy. Consequently, if these are not matched with an adjustment in retirement age, the future replacement rates will remain below the OECD average.
However, the recent tax reforms and court rulings signal a willingness to address some of the problems in the system, and further improvements could potentially occur in the next few years. Nevertheless, the pension indexing system still remains complex and many of the issues identified by the European Union and OECD remain. Thus, further reforms are needed, especially with regard to poverty reduction.
Citations:
1. Central Statistical Bureau (2020) Number of pensioners and the Average Amount of Old-age Pension (Database), Available at (in Latvian):
https://stat.gov.lv/lv/statistikas-temas/soc-aizsardziba-veseliba/pensijas-pabalsti/cits/5562-pensionari-un-pensijas, Last assessed: 02.01.2022.
2. Central Statistical Bureau (2019) Risk of poverty and social exclusion in Latvia in 2019, Available at (in Latvian): https://www.csb.gov.lv/lv/statistika/statistikas-temas/socialie-procesi/nabadziba/meklet-tema/433-nabadzibas-risks-un-sociala-atstumtiba-latvija, Last accessed: 02.01.2022.
3. Constitutional Court of Latvia (2020) The norms that determine the minimum amount of the old-age pension do not comply with Articles 1 and 109 of the Constitution, Available at: https://www.satv.tiesa.gov.lv/press-release/normas-kas-noteic-vecuma-pensijas-minimalo-apmeru-neatbilst-satversmes-1-un-109-pantam/, Last accessed: 07.01.2022.
4. OECD (2018) Review of the Pension System in Latvia, Available at: https://read.oecd-ilibrary.org/social-issues-migration-health/oecd-reviews-of-pe nsion-systems-latvia_9789264289390-en#page13, Last assessed: 02.01.2022
The average monthly pension in 2020 was €367.05. According to the Central Statistics Bureau, the at-risk-of-poverty rate among citizens aged 65 and over grew rapidly from 2012 (17.6%) to 2018 (47.9%). While the situation improved slightly in 2019, with 40.9% of the elderly being at risk, it still remains the most vulnerable age group in Latvia.
Two types of mandatory pension schemes exist in Latvia: a non-financial (notional) contribution (pay-as-you-go) and a funded contribution. There are also voluntary private pension funds that are complementary to the mandatory schemes. Jointly, these constitute a three-pillar pension system, which has increased the system’s fiscal sustainability and intergenerational equity.
The second pillar mandatory funded pension scheme has come under criticism for excessive fees. An independent private startup fund has emerged, offering substantially lower commissions and favorable terms. Legislators have taken interest and draft legislation is under consideration as of 2018 to limit bank commissions and fees levied for managing the mandatory funded pension scheme.
In a 2018 report, the OECD criticized Latvia’s three-pillar system and specifically the NDC schemes, because they automatically adjust to changes in the size of the labor force and life expectancy. Consequently, if these are not matched with an adjustment in retirement age, the future replacement rates will remain below the OECD average.
However, the recent tax reforms and court rulings signal a willingness to address some of the problems in the system, and further improvements could potentially occur in the next few years. Nevertheless, the pension indexing system still remains complex and many of the issues identified by the European Union and OECD remain. Thus, further reforms are needed, especially with regard to poverty reduction.
Citations:
1. Central Statistical Bureau (2020) Number of pensioners and the Average Amount of Old-age Pension (Database), Available at (in Latvian):
https://stat.gov.lv/lv/statistikas-temas/soc-aizsardziba-veseliba/pensijas-pabalsti/cits/5562-pensionari-un-pensijas, Last assessed: 02.01.2022.
2. Central Statistical Bureau (2019) Risk of poverty and social exclusion in Latvia in 2019, Available at (in Latvian): https://www.csb.gov.lv/lv/statistika/statistikas-temas/socialie-procesi/nabadziba/meklet-tema/433-nabadzibas-risks-un-sociala-atstumtiba-latvija, Last accessed: 02.01.2022.
3. Constitutional Court of Latvia (2020) The norms that determine the minimum amount of the old-age pension do not comply with Articles 1 and 109 of the Constitution, Available at: https://www.satv.tiesa.gov.lv/press-release/normas-kas-noteic-vecuma-pensijas-minimalo-apmeru-neatbilst-satversmes-1-un-109-pantam/, Last accessed: 07.01.2022.
4. OECD (2018) Review of the Pension System in Latvia, Available at: https://read.oecd-ilibrary.org/social-issues-migration-health/oecd-reviews-of-pe nsion-systems-latvia_9789264289390-en#page13, Last assessed: 02.01.2022
Graph View
How effectively do policies support the integration of migrants into society?
10
9
9
Cultural, education and social policies effectively support the integration of migrants into society.
8
7
6
7
6
Cultural, education and social policies seek to integrate migrants into society, but have failed to do so effectively.
5
4
3
4
3
Cultural, education and social policies do not focus on integrating migrants into society.
2
1
1
Cultural, education and social policies segregate migrant communities from the majority society.
Latvia faces challenges in integrating two categories of immigrants: migrant workers and non-citizens. Non-citizens are long-term residents of Latvia who were not eligible for citizenship when Latvia gained independence from the Soviet Union and have not been naturalized since independence. In 2021, non-citizens comprised 10.1% of the total population. While non-citizens have permanent residency rights and social guarantees similar to citizens, they do not have the right to take part in the elections.
Rights for all other immigrants generally depend on the type of residency permit. Individuals holding a temporary residence permit are particularly vulnerable, as they do not qualify for public healthcare, legal aid, or unemployment support. An individual holding a permanent residency permit or who has acquired long-term resident status within the European Union has the same rights as Latvian non-citizens. As of March 2010, all children, including children of migrant workers holding temporary residence permits, have access to free education. No restrictions are placed on the right to work for high-skilled migrant workers, foreign students or immigrants who have moved for family reasons. However, access to the local labor market is restricted for migrant workers who have obtained only a temporary residence permit. These individuals’ work rights are tied to the employer who invited them to Latvia. Temporary migrant workers do not have the ability to freely change employers or their position within the company.
In 2015, Latvia was ranked second-to-last among 38 European and North American countries in the Migrant Integration Policy Index. The index noted that Latvia still has the weakest policies among EU member states. Since then, Latvia has improved its integration policies by granting more equal opportunities and basic rights. For example, a law on citizenship for non-citizens’ children was introduced in 2019, which now entitles them to Latvian citizenship by birth. As a result, the overall MIPEX score improved by three points in 2020 (to 37 out of 100). This is only a minor improvement, however, and Latvia’s performance is still described as “equality on paper,” with its policies creating more obstacles than opportunities for integration.
Overall, immigrants in Latvia enjoy basic rights and protection, but not equal opportunities. A key issue for immigrant groups in Latvia is that they do not have voting rights in local elections, and cannot be members of political associations. Third-country nationals with temporary residence permits cannot organize protests or marches.
Citations:
1. Ministry of the Interior (2018) Report on the Progress and Results of the Implementation of the Provisions Provided by Section 23, Paragraph one, Clauses 3, 28, 29, 30, and 31 of the Immigration Law, Available at (in Latvian): http://tap.mk.gov.lv/doc/2019_01/IEMZino_191218.2722.docx, Last accessed: 02.01.2022.
2. Office of Citizenship and Migration Affairs (2021), Natural Persons Register: Statistics. Available at (in Latvian): https://www.pmlp.gov.lv/lv/fizisko-personu-registra-statistika-2021-gada?utm_source=https%3A%2F%2Fwww.google.com%2F, Last accessed 02.01.2022.
3. Migration Policy Group (2015 and 2020), Migrant Integration Policy Index, Available at: http://www.mipex.eu/latvia, Last accessed: 07.01.2022.
7. Guidelines on National Identity, Civil Society and Integration Policy (2012 – 2018), Available at (in Latvian): http://www.likumi.lv/doc.php?id=238195, Last accessed: 02.01.2022.
8. The Saeima (2018), The Role of Immigration in Labour Security in Latvia (in Latvian), Available at: http://www.saeima.lv/petijumi/Imigracijas_loma_darbaspeka_nodrosinajums_Latvija- 2018_aprilis.pdf, Last accessed: 02.01.2022.
Rights for all other immigrants generally depend on the type of residency permit. Individuals holding a temporary residence permit are particularly vulnerable, as they do not qualify for public healthcare, legal aid, or unemployment support. An individual holding a permanent residency permit or who has acquired long-term resident status within the European Union has the same rights as Latvian non-citizens. As of March 2010, all children, including children of migrant workers holding temporary residence permits, have access to free education. No restrictions are placed on the right to work for high-skilled migrant workers, foreign students or immigrants who have moved for family reasons. However, access to the local labor market is restricted for migrant workers who have obtained only a temporary residence permit. These individuals’ work rights are tied to the employer who invited them to Latvia. Temporary migrant workers do not have the ability to freely change employers or their position within the company.
In 2015, Latvia was ranked second-to-last among 38 European and North American countries in the Migrant Integration Policy Index. The index noted that Latvia still has the weakest policies among EU member states. Since then, Latvia has improved its integration policies by granting more equal opportunities and basic rights. For example, a law on citizenship for non-citizens’ children was introduced in 2019, which now entitles them to Latvian citizenship by birth. As a result, the overall MIPEX score improved by three points in 2020 (to 37 out of 100). This is only a minor improvement, however, and Latvia’s performance is still described as “equality on paper,” with its policies creating more obstacles than opportunities for integration.
Overall, immigrants in Latvia enjoy basic rights and protection, but not equal opportunities. A key issue for immigrant groups in Latvia is that they do not have voting rights in local elections, and cannot be members of political associations. Third-country nationals with temporary residence permits cannot organize protests or marches.
Citations:
1. Ministry of the Interior (2018) Report on the Progress and Results of the Implementation of the Provisions Provided by Section 23, Paragraph one, Clauses 3, 28, 29, 30, and 31 of the Immigration Law, Available at (in Latvian): http://tap.mk.gov.lv/doc/2019_01/IEMZino_191218.2722.docx, Last accessed: 02.01.2022.
2. Office of Citizenship and Migration Affairs (2021), Natural Persons Register: Statistics. Available at (in Latvian): https://www.pmlp.gov.lv/lv/fizisko-personu-registra-statistika-2021-gada?utm_source=https%3A%2F%2Fwww.google.com%2F, Last accessed 02.01.2022.
3. Migration Policy Group (2015 and 2020), Migrant Integration Policy Index, Available at: http://www.mipex.eu/latvia, Last accessed: 07.01.2022.
7. Guidelines on National Identity, Civil Society and Integration Policy (2012 – 2018), Available at (in Latvian): http://www.likumi.lv/doc.php?id=238195, Last accessed: 02.01.2022.
8. The Saeima (2018), The Role of Immigration in Labour Security in Latvia (in Latvian), Available at: http://www.saeima.lv/petijumi/Imigracijas_loma_darbaspeka_nodrosinajums_Latvija- 2018_aprilis.pdf, Last accessed: 02.01.2022.
Graph View
How effectively does internal security policy protect citizens against security risks?
10
9
9
Internal security policy protects citizens against security risks very effectively.
8
7
6
7
6
Internal security policy protects citizens against security risks more or less effectively.
5
4
3
4
3
Internal security policy does not effectively protect citizens against security risks.
2
1
1
Internal security policy exacerbates the security risks.
The Ministry of Interior, the State Police, the Security Police, the State Fire and Rescue Service, the State Border Guard, and the Office of Citizenship and Migration Affairs are responsible for domestic security policy. They collaborate on some policy issues, notably on immigration policy. The total number of registered crimes fell from 45,639 in 2016 to 38,767 in 2020.
Despite international developments, the threat of terrorism remains low. There have been no criminal offenses associated with terrorism. In late 2015, the security police started a criminal investigation into alleged participation in the military conflict in Syria, which was followed by one conviction. In 2016, two criminal investigations for terrorism threats were launched, another for inciting terrorism, and four for participation in foreign armed conflicts. Similarly, in 2019, criminal proceedings were initiated against one person for unlawful participation in the armed conflict in eastern Ukraine, while three people were detained on the grounds of illegal arms trade and money laundering.
Opinion polls from 2019 indicate that public trust in the police remains high and the majority of people feel safe (79% of respondents reported feeling safe or rather safe in regards to the State Police, and 60% indicated they had trust in the police).
Citations:
1. Research center SKDS (2019), Attitude Toward the State Police, Available at (in Latvian): http://petijumi.mk.gov.lv/sites/default/files/title_file/Valsts_policija_Petijums_2018_Attieskme_pret_Valsts_policiju_0.pdf, Last accessed: 02.01.2022.
2. Central Statistical Bureau (2020), Number of registered criminal offenses: Database, Available at: https://www.csb.gov.lv/en/statistics/statistics-by-theme/social-conditions/crime/tables/skg010/number-recorded-crimes, Last accessed: 02.01.2022.
3. Latvian State Security Service (2021) Strategy for the Prevention of Terrorism Financing for 2019-2021, Available at: https://www.dp.gov.lv/en/areas-of-activity/counterterrorism/#Threat%20level, Last assessed: 02.01.2022.
4. Latvian State Security Service (2019), VDD detains three persons for violation of sanctions determined by international organisations, Available at: https://vdd.gov.lv/uploads/materials/17/en/spft-eng-1.pdf, Last accessed: 02.01.2022.
5. Latvian State Security Service (2019), VDD calls for criminal prosecution for unlawful participation in the armed conflict in Eastern Ukraine, Available at: https://vdd.gov.lv/en/news/press-releases/vdd-calls-for-criminal-prosecution-for-unlawful-participation-in-the-armed-conflict-in-eastern-ukraine, Last accessed: 02.01.2022.
6. Latvian State Police (2020) Presentation on Crime in Latvia, Available at: https://www.vp.gov.lv/lv/media/1601/download, Last accessed: 02.01.2022.
Despite international developments, the threat of terrorism remains low. There have been no criminal offenses associated with terrorism. In late 2015, the security police started a criminal investigation into alleged participation in the military conflict in Syria, which was followed by one conviction. In 2016, two criminal investigations for terrorism threats were launched, another for inciting terrorism, and four for participation in foreign armed conflicts. Similarly, in 2019, criminal proceedings were initiated against one person for unlawful participation in the armed conflict in eastern Ukraine, while three people were detained on the grounds of illegal arms trade and money laundering.
Opinion polls from 2019 indicate that public trust in the police remains high and the majority of people feel safe (79% of respondents reported feeling safe or rather safe in regards to the State Police, and 60% indicated they had trust in the police).
Citations:
1. Research center SKDS (2019), Attitude Toward the State Police, Available at (in Latvian): http://petijumi.mk.gov.lv/sites/default/files/title_file/Valsts_policija_Petijums_2018_Attieskme_pret_Valsts_policiju_0.pdf, Last accessed: 02.01.2022.
2. Central Statistical Bureau (2020), Number of registered criminal offenses: Database, Available at: https://www.csb.gov.lv/en/statistics/statistics-by-theme/social-conditions/crime/tables/skg010/number-recorded-crimes, Last accessed: 02.01.2022.
3. Latvian State Security Service (2021) Strategy for the Prevention of Terrorism Financing for 2019-2021, Available at: https://www.dp.gov.lv/en/areas-of-activity/counterterrorism/#Threat%20level, Last assessed: 02.01.2022.
4. Latvian State Security Service (2019), VDD detains three persons for violation of sanctions determined by international organisations, Available at: https://vdd.gov.lv/uploads/materials/17/en/spft-eng-1.pdf, Last accessed: 02.01.2022.
5. Latvian State Security Service (2019), VDD calls for criminal prosecution for unlawful participation in the armed conflict in Eastern Ukraine, Available at: https://vdd.gov.lv/en/news/press-releases/vdd-calls-for-criminal-prosecution-for-unlawful-participation-in-the-armed-conflict-in-eastern-ukraine, Last accessed: 02.01.2022.
6. Latvian State Police (2020) Presentation on Crime in Latvia, Available at: https://www.vp.gov.lv/lv/media/1601/download, Last accessed: 02.01.2022.
Graph View
To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in low- and middle-income countries?
10
9
9
The government actively and coherently engages in international efforts to promote equal socioeconomic opportunities in low- and middle-income countries. It frequently demonstrates initiative and responsibility, and acts as an agenda-setter.
8
7
6
7
6
The government actively engages in international efforts to promote equal socioeconomic opportunities in low- and middle-income countries. However, some of its measures or policies lack coherence.
5
4
3
4
3
The government shows limited engagement in international efforts to promote equal socioeconomic opportunities in low- and middle-income countries. Many of its measures or policies lack coherence.
2
1
1
The government does not contribute (and often undermines) efforts to promote equal socioeconomic opportunities in low- and middle-income countries.
Latvia’s development policy is closely aligned with its foreign policy. In the past, Latvia has primarily focused on the countries of the EU Eastern Partnership (Georgia, Moldova and Ukraine) in its development efforts, but more recently in its COVID-19 response, Latvia has launched a grant project competition to help Eastern Partnership countries and the Central Asian countries of Kyrgyzstan, Tajikistan and Uzbekistan.
Overall, Latvia’s development cooperation aims to promote sustainable growth and stability in its region while also contributing to sustainable development. In 2020, Latvia provided $40.2 million in aid, representing 0.12% of gross national income (GNI). This was an increase of 14.8% in real terms in volume and an increase in the percentage of GNI relative to 2019.
In 2021, the Foreign Ministry’s budget allocated €583,813 for the implementation of bilateral development cooperation measures. Some €120,000 of these funds were channeled toward projects targeting the support of civil society in Belarus. These projects, which were selected through a competitive process, were designed to provide immediate assistance to those affected by the Belarusian authorities’ violence, and further aimed to support the development of Belarusian civil society.
Citations:
1. Ministry of Foreign Affairs (2021) Grant Competition announced for projects in support of civil society in Belarus in 2021, Available at: https://www2.mfa.gov.lv/en/policy/development-co-operation/grant-competition-announced-for-projects-in-support-of-civil-society-in-belarus-in-2021, Last accessed: 10.01.2022.
2. Ministry of Foreign Affairs (2019), Latvia’s Bilateral Development Cooperation in 2018, Available at: https://www.mfa.gov.lv/en/news/latest-news/62951-latvia-s-bilateral-development-cooperation-in-2018, Last accessed 10.01.2022.
3. Ministry of Foreign Affairs (2020) Development Cooperation Projects 2019, Available at: https://www2.mfa.gov.lv/en/news/latest-news/latest-infographics/66026-development-cooperation-projects-2019, Last accessed: 10.01.2022.
3. State Development Cooperation Policy Plan (2016 – 2020), Available at (in Latvian): http://www.likumi.lv/ta/id/284775-par-attistibas-sadarbības-politikas-pamatnostadnem-2016-2020-gadam. Last accessed: 10.01.2022.
4. State Development Cooperation Policy Plan (2021 – 2027), Available at (in Latvian): https://likumi.lv/ta/id/322455-par-attistibas-sadarbibas-politikas-pamatnostadnem-20212027-gadam, Last accessed: 10.01.2022.
5. OECD (2021) Development Cooperation Profiles: Latvia, Available at:https://www.oecd-ilibrary.org/sites/231c67ca-en/index.html?itemId=/content/component/231c67ca-en, Last accessed: 10.01.2022.
Overall, Latvia’s development cooperation aims to promote sustainable growth and stability in its region while also contributing to sustainable development. In 2020, Latvia provided $40.2 million in aid, representing 0.12% of gross national income (GNI). This was an increase of 14.8% in real terms in volume and an increase in the percentage of GNI relative to 2019.
In 2021, the Foreign Ministry’s budget allocated €583,813 for the implementation of bilateral development cooperation measures. Some €120,000 of these funds were channeled toward projects targeting the support of civil society in Belarus. These projects, which were selected through a competitive process, were designed to provide immediate assistance to those affected by the Belarusian authorities’ violence, and further aimed to support the development of Belarusian civil society.
Citations:
1. Ministry of Foreign Affairs (2021) Grant Competition announced for projects in support of civil society in Belarus in 2021, Available at: https://www2.mfa.gov.lv/en/policy/development-co-operation/grant-competition-announced-for-projects-in-support-of-civil-society-in-belarus-in-2021, Last accessed: 10.01.2022.
2. Ministry of Foreign Affairs (2019), Latvia’s Bilateral Development Cooperation in 2018, Available at: https://www.mfa.gov.lv/en/news/latest-news/62951-latvia-s-bilateral-development-cooperation-in-2018, Last accessed 10.01.2022.
3. Ministry of Foreign Affairs (2020) Development Cooperation Projects 2019, Available at: https://www2.mfa.gov.lv/en/news/latest-news/latest-infographics/66026-development-cooperation-projects-2019, Last accessed: 10.01.2022.
3. State Development Cooperation Policy Plan (2016 – 2020), Available at (in Latvian): http://www.likumi.lv/ta/id/284775-par-attistibas-sadarbības-politikas-pamatnostadnem-2016-2020-gadam. Last accessed: 10.01.2022.
4. State Development Cooperation Policy Plan (2021 – 2027), Available at (in Latvian): https://likumi.lv/ta/id/322455-par-attistibas-sadarbibas-politikas-pamatnostadnem-20212027-gadam, Last accessed: 10.01.2022.
5. OECD (2021) Development Cooperation Profiles: Latvia, Available at:https://www.oecd-ilibrary.org/sites/231c67ca-en/index.html?itemId=/content/component/231c67ca-en, Last accessed: 10.01.2022.