Overview of the Latvian approach
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.
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.
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.
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);
Employers and employees;
Young people making the transition from education to work;
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.