Analysing the socioeconomic dimensions of employment
Published: 22 October 2006
In order to obtain information for the National Action Plan on Employment, in 2004 the Republic of Latvia Ministry of Economy (Latvijas Republikas Ekonomikas Ministrija, LR EM [1]) commissioned a study in cooperation with economists and statisticians, /Economic analysis of employment trends and the development of a relevant statistical examination/. The study is both an assessment of employment as a socioeconomic problem and an analysis of the methodology used to reflect employment statistics. It provides a detailed explanation of labour market statistics and offers a unique combination of economic and statistical approaches for analysing labour market issues.[1] http://www.em.gov.lv/
In recent times, it has come to light that the government lacks adequate information about job creation, job retention and job losses, as well as occupational structures, and sectoral and regional aspects. This is needed for the purpose of drafting employment policy documents, in particular with a view to Latvia meeting the targets of the EU Lisbon Strategy. In order to fill this gap in knowledge, in 2004 the Ministry of Economy commissioned research into the socioeconomic aspects of employment, which would analyse the methodology used to capture employment statistics. The study includes wide ranging statistics on jobs and employment, and a detailed explanation of labour market data. It offers a unique combination of economic and statistical approaches for analysing labour market issues.
Background information
In order to obtain information for the National Action Plan on Employment, in 2004 the Republic of Latvia Ministry of Economy (Latvijas Republikas Ekonomikas Ministrija, LR EM) commissioned a study in cooperation with economists and statisticians, Economic analysis of employment trends and the development of a relevant statistical examination. The study is both an assessment of employment as a socioeconomic problem and an analysis of the methodology used to reflect employment statistics. It provides a detailed explanation of labour market statistics and offers a unique combination of economic and statistical approaches for analysing labour market issues.
Aims and methodology of study
The study identifies quantitative and qualitative changes in the national workplace situation, their causes, contributing factors and barriers. The summaries and conclusions pertaining to employment, labour market conditions and development trends are based on inspections, surveys, statistical overviews and statistics obtained from the register of enterprises.
The research draws on the Workforce Survey of the Central Statistical Bureau (Centrala statistikas parvalde, CSP), the Employers’ Survey of the State Employment Agency (Nodarbinatibas Valsts agentura, NVA), the Labour Market Survey of the Latvian Institute of Statistics (Latvijas Statistikas instituts, LSI) and other sources. Using a variety of sources allows for a multifaceted perspective of labour market developments: the questionnaire of the Workforce Survey is addressed to individual workers, whereas the employers’ and labour market surveys are company based.
The LR EM study encompasses all of the main issues connected with European Union policy for promoting employment. The comprehensive report outlines the research findings, complemented by 114 tables and numerous graphs; the report (in Latvian, 1.1Mb zipped PDF) is available online.
Jobs and employment – methodological aspect
The study analyses the link between jobs and employment policy, including within the guidelines of EU employment policy. The need for deeper research into employment issues was prompted by the fact that Latvia had not yet reached the targets set in the EU Lisbon Strategy.
An international comparison between employment levels is made more difficult by the different interpretations of statistical terms. The study explains the definitions used in employment policy, including the Latvian versions and the statistical meaning of such terms as ‘place of employment’, ‘workplace’ and ‘job’.
| Employment level | Female employment level | Employment level for 15–64 year olds | ||||
|---|---|---|---|---|---|---|
| 2003 | Gap with 2010 targets | 2003 | Gap with 2010 targets | 2003 | Gap with 2010 targets | |
| Latvia | 61.8 | 8.2 | 57.9 | 2.1 | 44.1 | 5.9 |
| EU15 | 64.3 | 5.7 | 56.0 | 4.0 | 41.7 | 8.3 |
| EU25 | 62.9 | 0.1 | 55.0 | 5.0 | 40.2 | 9.8 |
| 2010 targets | 70% | >60% | 50% | |||
Source: Economic analysis of employment trends and the development of a relevant statistical examination, LR EM, 2004
Labour market supply and demand
The study is based on the concept that, in designing employment policy, it is important to establish the availability of labour resources, including labour market trends, and also the opportunities for creating jobs and improving both qualitative and quantitative aspects.
Using data from company annual reports and statistics from the enterprise register, the study analyses company profiles, as well as the number of jobs and employment in relation to: employment status, main job and other job, full-time and part-time work, and the time spent in the main job and other job according to occupation. At each step of the analysis, an explanation is provided of the particularities of the statistical reporting.
The results of investigations into labour market conditions and trends provide information from another perspective. The study describes the methodology of the Labour Market Survey and analyses the labour market situation in agriculture, manufacturing, retail and the services sector. For each sector, the analysis explores the employment structure and trends in relation to employee numbers and causes of possible changes, working time and organisation, research and development (R&D) resources, and job creation. In particular, expenditure on R&D resources is studied closely because it influences enterprise competitiveness, facilitates the introduction of new technologies and thus increases the number of jobs and job quality.
Impact of direct foreign investment
The study concluded that non-financial investment – including direct foreign investment – promotes job creation and the improvement of working conditions. Non-financial investment includes long-term investment in intangible fixed assets, such as computer software, and investment in tangible fixed assets, such as buildings and infrastructure. In reaching this conclusion, the analysis examined the impact of non-financial investment on changes to the number of people in work or, more specifically, the impact on job numbers and employment, including in the manufacturing and services sectors and development trends in industry.
Conclusions
Overall, the study found that there was a need to further improve labour market analysis methodology, statistical observation, data collection, as well as indicator designation and calculation methods.
Raita Karnite, Institute of Economics, Latvian Academy of Sciences
Eurofound recommends citing this publication in the following way.
Eurofound (2006), Analysing the socioeconomic dimensions of employment, article.
