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Skills anticipation in Latvia (2022 Update)
Summary
Overview of the Latvian approach
Since 2007, when a medium- and long-term labour market forecast was put in place, 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. With further funding from the ESF (2016-2021) it is expected that several activities on improving skills forecasting will become more comprehensive. 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 web-based labour market forecasting system is currently being developed as part of the ESF funded project. 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 education 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.
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,[i] 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; 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 in the country 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 funding from the ESF between 2014 and 2020, several activities on improving skills forecasting were under implementation aiming at:
- 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;
- improving dissemination of the results of skills anticipation to policymakers, social partners and other stakeholders.
The labour market forecasting system is being further developed via the ESF-funded project ‘Development of labour market forecasting system’ (2016-2021), managed by the State Employment Agency in cooperation with Ministry of Economics. The project aims at providing policy makers with data to support job pre-emptive labour market reforms. An interactive online tool will be developed for policy makers and the general public (including education institutions, career planning and professional development centres, and graduates who plan to continue their studies), providing access to the results of the labour market forecasts.
The development of an online tool to facilitate interaction, promote understanding between stakeholders and link education with the labour market was highlighted in a 2019 study carried out on the possibilities of setting up a system of reforming the labour market and linking labour market forecasts to policies.
During the implementation of the project, the following activities will be implemented between August 2016 and December 2021:
- improvement of short-term labour market forecasting methodology, including the preparation of short-term skills forecasts and development of guidelines for users of the methodology;
- carrying out of annual employer surveys to update short-term labour market forecasts;
- development of technical specifications for the development of the labour supply and demand forecasting platform (including medium and long-term forecast analysis tool and visual prototype;
- running information and training activities for staff and officials of the institutions involved in the development and implementation of employment policies.
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 which can be used in employment, education, and social policy making. This provides a structured framework for discussing and developing policy responses to labour market challenges.[ii]
Legal framework
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[iii] 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 for approval by the Cabinet of Ministers (CM). The Decision also foresees that such a report is prepared on an annual basis. Since 2017 the Ministry of Economics has been preparing it biennially.
Following the 2016 CM Regulation[iv] on the ‘Rules of implementation of the system of anticipating changes in the labour market’, the PES, in conjunction with the Ministry of Economics, implements a project co-financed by the ESF regarding 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 (Latvijas Darba devēju konfederācija) and the Free Trade Union Confederation (Latvijas Brīvo arodbiedrību savienība).
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 relevant to labour market and education.
Over the past few years, the role of stakeholders has been outlined in the Educational Development Guidelines 2014-2020.[v] 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 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.[vi] 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. Among the most recent is the ESF-funded project “Development of labour market forecasting system” (2016-2021), which is implemented by the Ministry of Economics in cooperation with the State Employment Agency.
Methods and tools
A variety of tools are used by stakeholders. The State Employment Agency is setting up a new system for future skills analysis with a 5-year horizon. The Agency uses descriptive statistics/stock taking, quantitative forecasting, skills and jobs surveys, qualitative research (including qualitative forecasting) and foresight (interviews and surveys with stakeholders, experts’ workshops / meetings / panels and SWOT analysis). It develops skill needs analysis on skill supply and skill demand on a monthly basis[vii].
Skills assessment
The Sectoral Experts Councils, formed in 2011, consist of sectoral employers’ organisations and their associations, sectoral trade unions, the Ministry of Education and Science, and sectoral ministries. These councils run ad-hoc skills assessments, for example on sectoral qualifications structures.
Skills forecasts
To produce skills forecasts (by occupation and education level) Latvia uses the Dynamic Optimisation Model, first developed in 2007 and extensively modified in 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:[viii]
- 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-funded ‘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,[ix] occupational groups,[x] regions,[xi] education level[xii] and field of education.[xiii]
In 2018, several studies co-financed by the ESF were conducted on improving the methodology of short-term demand and supply forecasts. The studies recommended to expand the data sources used (such as integrating data from different registers into the forecast model), suggested ways to develop the skills sets in occupations and proposed improved data visualisation to better meet the needs of the target groups.
As noted earlier (see “Description”), the ESF-funded project ‘Development of labour market forecasting system’ (2016-2021), managed by the State Employment Agency in cooperation with Ministry of Economics, aims at the improvement of the labour market forecasting system. The aim of the project is for skills forecasting to inform policy-making, while taking into consideration economic needs. The improved system is expected to provide information on skills and occupations in the short, medium and long-term, and on learning opportunities. It is envisaged that the results of skills forecasts will be used to assess the offer of VET programmes, as well as the active labour market policies.
Skills foresight
Skills foresight activities are not systematically undertaken in the country. 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. A feasibility study on improving the current labour market forecasting system, conducted for the Ministry of Economics, suggested to develop skills foresight activities. The study explained the importance of developing qualitative skills anticipation methodologies such as skills foresight and combining them with quantitative approaches.
Other skills anticipation practices
As part of the short-term labour market forecasting process, the State Employment Agency has carried out employer surveys under an ESF co-funded project, 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 (Valsts izglītības satura centrs) 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.
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 in 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 to 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 collaborate on implementing new measures in the period up to 2020, such as increased stakeholder involvement in discussing the implications of the forecasts for policy, streamlining the number of working parties and committees that consider different aspects of the forecasts, improving dissemination channels (e.g. more online access) and increasing 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.
The PES disseminates skills intelligence in internal conferences/seminars for staff (including career guidance counsellors) and uses it to shape formal training content/lifelong learning and support and strengthen career guidance[xiv].
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 look for 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.
Since 2012, career counsellors in the State Employment Agency have received data on labour needs in different sectors, building on the forecast results.
The annual medium- and long-term reports are available 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 can be concerns that the forecast results are not interpreted in a consistent way from all involved partners.
Please cite this document as: Cedefop.(2022).Skills anticipation in Latvia. Skills intelligence: data insights. URL [accessed XXX] |
Bibliography
- Andersen, T., Feiler, L. and Schulz, G. (2015). The Role of Employment Service Providers. Guide to Anticipating and Matching Skills and Jobs (volume 4). Luxembourg: Publications Office of the European Union.
- Bartlett, W. 2012. Skills anticipation and matching systems in transition and developing countries. Available online:
- Cedefop/OECD/ETF/ILO/. (2014). Survey on Anticipating and Responding to Changing Skill Needs.
- Cedefop. (2020). Developments in vocational education and training policy in 2015-19: Latvia. Cedefop monitoring and analysis of VET policies.
- Cedefop. (2019). 2018 Skill forecast in Latvia.
- Central Statistical Bureau
- Councils of Sectoral Experts; information also available at https://www.cedefop.europa.eu/en/tools/matching-skills/all-instruments/studies-sectors-and-creation-sectoral-expert-councils
- Daija, Z.; Kinta, G.; Labunskis, E. (2020). Vocational education and training for the
- future of work: Latvia. Cedefop ReferNet thematic perspectives series.
- European Commission. (2022). Future skills, career guidance and lifelong learning in PES. Thematic paper. Brussels. Author: Lukasz Sienkiewicz.
- EEPO. (2015). Skills governance in the EU Member States. developed by the European Employment Policy Observatory for the European Commission. Brussels: European Commission.
- EEPO. (2015). Country fiches on skills governance in the Member States – Latvia. developed by the European Employment Policy Observatory for the European Commission. Brussels: European Commission.
- European Social Fund
- Latvian Chamber of Commerce and Industry
- Ministry of Economics
- __ (2013). Thematic surveys carried out by researchers group within the activity Surveys in the labour market sector (and https://www.em.gov.lv/sites/em/files/gala_zinojums_eng_dorus_09_20131_0.pdf in English) of the ESF project of the Ministry of Economics.
- __ (2014a). Aptaujas darba tirgus jomā.
- __ (2014b). Darba tirgus vidēja un ilgtermiņa prognozēšanas instrumentārija pilnveide. Summary report https://www.em.gov.lv/lv/media/703/download?attachment
- __ (2014c). Pētījumi darba tirgus jomā.
- __ (2018). An informative report on Medium and Long-term Labour Market forecasts.
- __ (2019a). Darba tirgus apsteidzošo pārkārtojumu sistēmas izveides iespējas un vidēja un ilgtermiņa darba tirgus prognožu sasaiste ar rīcībpolitiku. Developed by AC Konsultācijas.
- __ (2019b). Vadlīnijas vidēja un ilgtermiņa darba tirgus prognožu interpretācijai un izmantošanai. (Guidelines for the interpretation and use of medium and long-term labor market forecasts).
- Ministry of Education and Science
- __ (2013). Guidelines for the Development of Education for 2014-2020.
- Ministry of Finance. (2014). Operational Programme Growth and Employment.
- Ministry of Welfare
- National Centre for Education
- OECD. (2016). Getting Skills Right. Assessing and Anticipating Changing Skill Needs. Paris: OECD Publishing.
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Endnotes
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[i]Development Project Institute of the University of Latvia. (2007).
[ii]Ministry of Economics. (2018).
[iii]No. 48 of 14 July 2009
[iv]No.126
[v]A medium-term policy planning document that sets out the structure of the education sector development and prospects for the next seven years. Ministry of Education and Science. (2013).
[vi]Ministry of Economics. (2018). An informative report on Medium and Longer-term Labour Market forecasts.
[vii]European Commission. (2022).
[viii]Ministry of Economics. (2016). An informative report on Medium and Longer-term Labour Market forecasts.
[ix]15 sectors (NACE).
[x]At 3-digit level (127 occupations) consistent with ISCO-08.
[xi]Riga, Riga area, Kurzeme, Zemgale, Latgale, Vidzeme, Latvia.
[xii]Eight levels.
[xiii]79 fields
[xiv]European Commission. (2022).
Data insights details
Table of contents
Page 1
SummaryPage 2
DescriptionPage 3
Methods and toolsPage 4
Dissemination and usePage 5
BibliographyPage 6
Endnotes