In 2021, Latvia had an average population of around 2 million (1 893 200), around half of which or 1 million (934 600 in 2021) were economically active. At the beginning of 2021, 1 187 891 or 62.7% of the total population were Latvian, 463 587 or 24.5% Russian, and the remaining 12.8% were composed of other ethnic groups. Economic activity is mainly concentrated in Riga and the surrounding areas, where around half (55%) of the country’s population lives. Many of the people living in the surrounding districts work in Riga.
The rapid global spread of Covid-19 and the decline in economic activity brought about changes in the labour market in the first half of 2020: the employment rate decreased and unemployment increased. Labour market indicators stabilised in the second half of 2020 with a general improvement of the economic situation, but they deteriorated again following the announcement of an emergency situation in November 2020 and introduction of the associated measures to contain the virus. At the beginning of 2021, the number of registered unemployed continued to grow (reaching 8.2%), but in March 2021 situation on the labour market started to improve significantly as the number of unemployed decreased by 13% compared to the pre-COVID-19 pandemic situation (it reached its lowest point of 6.0% in September). However, a gradual upward trend in the number of registered unemployed resumed as an emergency situation was announced again on 9 November 2021 to contain COVID-19. The unemployment situation therefore depends both on general seasonal factors and measures aimed at containing the virus, but overall, in the long term, the situation on the labour market is improving and demand for workforce is growing in a number of sectors of the national economy. Likewise, various support measures for employers and active labour market policy measures contribute to favourable conditions for the development of the labour market.
The level of economic activity in Latvia still varies greatly from region to region, with most jobs concentrated in Riga and the surrounding areas, while the number of jobs in other regions is much lower. At the end of March 2022, the registered unemployment rate was the lowest in Riga (4.6%) and the Riga region (4.7%), while the highest rate was recorded in the Latgale region (14.8%). The registered unemployment rate stood at 7.6% in the Vidzeme region, 6.8% in the Zemgale region and 7.5% in the Kurzeme region.
According to the Labour Force Survey of the Central Statistical Bureau (CSB), 864 000 people, or 62.5% of the population aged 15 to 74, were employed in Latvia in 2021. Over a year, the employment rate fell by 1.7 percentage points, while the number of employed persons decreased by 29 000.
An assessment of the information provided by employers on the required level of education for new jobs created in 2021 indicates that employees with vocational/vocational secondary education are in the highest in demand (35%), followed by those with higher vocational education (with qualification) (21%) and general secondary education (20% of all new jobs).
On the labour market, there is a demand for flexible and skilled workers ready to perform duties associated with several positions at the same time and who, in addition to the specific occupational skills required, also have some general skills, for example, knowledge of foreign languages. Interaction and communication skills, as well as knowledge of the official State language, are the most frequently mentioned key skills, in addition to the specific knowledge/skills required by the employer. Planning/time management skills rank fourth on the list of the most relevant additional skills. User-level computer skills, knowledge of the English language, organisational/managerial skills and a driving licence are required or at least desirable for about half of the available vacancies. The need for language skills has decreased during the year in respect of all languages, except for English, which has become more appreciated. User-level computer skills and a driving licence are also required more frequently.
Both in the medium- and long-term, the demand will mostly increase for employees working in highly skilled professions. The fastest decline in demand for labour will be in low-skilled occupations. It will affect all sectors. Considering the demographic trends, the supply of adequately skilled workers could significantly decrease in the future; hence, the importance of secondary vocational education will continue to increase. If the current structure of higher education is maintained, the workforce shortage in the higher education group will mostly affect the pool of professionals educated in engineering, natural sciences and ICT (STEM). By 2027, the shortage of adequately skilled workers may exceed 14 000, mostly in areas such as architecture and civil engineering, computer sciences, physical and engineering sciences. Furthermore, due to ageing of the society and higher demand for medical services in both domestic and foreign markets, a noticeable shortage of healthcare and social care professionals will continue to plague the labour market.
Businesses increasingly complain of labour shortages. Vacancies that cannot be filled for a long period of time mainly require specific professionals, such as lorry drivers, unskilled workers, concrete workers, construction workers and bricklayers.
The data of the State Employment Agency show that most vacancies (58%) in the 1st quarter of 2022 were registered in the profession groups requiring medium-level qualifications (lorry drivers, concrete workers, cooks, builders, bricklayers, workers performing finishing works and retail shop assistants), followed by occupations with low-level qualifications (29%) (unskilled workers, construction workers, assistant peat mining workers, seasonal agricultural workers, workshop workers, cleaners, assistant road construction workers). Highly qualified professions account for 13% of the overall number of registered vacancies (programmers, nurses (medical nurses), client/sales assistants, salespeople, pre-school teachers, project managers, application developers).
 Unemployment forecast for 2022
 Report ‘Labour market short-term forecast for 2021: Employer survey’
 Report ‘Labour market short-term forecast for 2021: Employer survey’
 The Ministry of Economy Information Report ‘On medium- and long-term labour market forecasts’, 2020
In order to promptly provide help to employees who lost their jobs and employers whose businesses were affected by the COVID-19 pandemic, numerous additional aid mechanisms were introduced and existing employment support measures were extended in 2020, among them wage subsidies, some of which were continued in modified form in 2021. Adjustment of support measures for the changing needs of the unemployed registered with the NVA and partners of the NVA also continued. Likewise, the NVA’s active labour market policy measures were improved in 2021 by adjusting them to changes in the national economy while helping the unemployed overcome obstacles that prevent them from participating in the labour market and also providing support for employers who require additional workforce. Re-training and skill improvement measures will also be specifically emphasised in 2022, including those promoting participation in open training programmes available on online platforms and inclusion of people with disabilities in the labour market. 11 185 vacancies registered by the NVA at the end of Q1 2022 offered a salary of EUR 1 143, which indicates a willingness to employ people from third countries. These account for 34% of open vacancies. From a regional perspective, 85% of these vacancies are in the Riga region. Among the regions, the Riga region also accounts for the highest proportion of the total number of open vacancies, i.e. 41%.
According to the information provided by the Central Statistical Bureau, on average, there were 24 400 vacancies in Latvia in 2021, which is an increase of 4 900 or 25% on 2020. The largest increase was observed in the following sectors: Administrative and service organisations, Information and communication services and Wholesale and retail trade, repair of motor vehicles and motorcycles. The largest decrease in the number of jobs was experienced in the following sectors: Mining and quarrying, Agriculture, forestry and fisheries and Other services.
Highly qualified applicants, applicants with ICT skills and knowledge of numerous foreign languages (particularly Nordic languages) still have good opportunities of finding a suitable job in Latvia.
According to the data of the State Employment Agency, the highest number of vacancies at the end of the 1st quarter of 2022 was in the construction/real estate sector (32%), manufacturing (17%), transport/logistics (11%), catering/food industry (6%).
 Unemployment forecast for 2022
According to employers, they mainly require qualified employees with higher education, social skills (contact, communication, presentation, negotiation and other skills), computer skills (both general and specific), good knowledge of Latvian and foreign languages.
Among the total number of unemployed people registered with the State Employment Agency at the end of the 1st quarter of 2022, people with vocational education accounted for the largest share (34% of the total number of registered unemployed people), followed by people with general secondary education (26%), higher education (21%); primary education (16%) and below-primary education (2%). Number of registered unemployed people at the end of the 1st quarter of 2022 across occupational groups by last occupation: medium-skilled professions: 48%, high-skilled professions: 28%, and low-skilled professions: 23%.
The analysis of vacancies registered with the State Employment Agency shows that, at the end of the 1st quarter of 2022, the largest surplus of unemployed people was among elementary professions, while qualified workers and craftsmen were sought after. The number of registered unemployed persons by desired occupation exceeds demand (the number of registered vacancies) most of all in the low-skilled occupation group: unskilled workers, cleaners, street cleaners; medium-skilled occupation group: car drivers, wardens, retail shop assistants, sales assistants; high-skilled occupation group: office administrators, clerks, assistant accountants, project managers and sales assistants.
Labour surpluses are expected in respect of people with general secondary education and primary education. Labour surpluses in these groups will be largely determined by declining demand for workers with relevant qualifications such as elementary professions, whereas manual work will be increasingly replaced with various technology solutions. It is also expected that the supply of workers with elementary or lower education will increase in the medium term, with half of them potentially having problems finding a suitable job and entering the labour market in 2027.
State Employment Agency
Central Statistical Bureau
Ministry of Economy
 The Ministry of Economy Information Report ‘Medium and long-term labour market forecasts’, 2020.