Anatomy of labour reserves in the Baltic countries: a snapshot 15 years after the EU accession

Olegs Krasnopjorovs

No 2019/02, Discussion Papers from Latvijas Banka

Abstract: This paper investigates internal and external labour reserves in Latvia, Estonia and Lithuania. We find considerable internal labour reserves in the form of still high natural rate of unemployment and in hidden unemployment as many economically inactive people are available for work but are not actively engaged in job seeking. The employment rate is particularly low for upper-middle-aged men, especially those without a tertiary education degree, which is likely to reflect a low incidence of lifelong learning, low digital skills and rapidly deteriorating health condition. We document low employment of youth, mirroring low prevalence of apprenticeships. In Lithuania and Latvia, there is also a postponed entry of young women into the labour market. Moreover, the employment rate of Estonian women of fertile age who hold a tertiary education degree is consistently lower than that of their EU counterparts. These internal labour reserves total more than 25 thousand people in Estonia, 55 thousand in Latvia and 85 thousand in Lithuania, corresponding to 4%–7% of the total employment in these countries. Particular targeting on ethnic minorities and people living in disadvantaged regions is essential for activating these labour reserves. Moreover, we point to considerable external labour reserves in the form of more than a half million Baltic nationals currently residing in wealthier EU countries.

Keywords: labour market; employment; unemployment; participation; migration (search for similar items in EconPapers)
JEL-codes: E24 J21 J82 (search for similar items in EconPapers)
Date: 2019-09-30
New Economics Papers: this item is included in nep-cis, nep-eur, nep-mac and nep-tra
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ltv:dpaper:201902

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