EMCC European Monitoring Centre on Change

Promoting the regional mobility of unemployed people for work reasons

Latvia
Phase: Management
Tipas:
  • Access to finance
  • Fostering mobility
Last modified: 03 August, 2021
Projekto pavadinimas::

Nodarbināto personu reģionālās mobilitātes veicināšana

Angliškas pavadinimas:

Promoting the regional mobility of unemployed people for work reasons

Coverage/Eligibility

Within the framework of this measure, financial support may be granted to an employee who complies with all of the following conditions:

  • The person has been registered as unemployed for at least two months before entering into employment with the current employer.
  • Employment is established with an employer who, at least a week before entering into the legal relationship with the employee, had registered a vacancy for the same profession or occupation the employee is holding.
  • The work place is located no closer than 15 km from the employee’s declared place of residence and the transportation or rent costs are not covered by the employer.
  • The employee has lived in the declared place of residence at least six months or has changed the declared place of residence within six months time, and both the new and previous place of residence are located within the same municipality.
  • The employment relationship has been established for at least for 8 months, the employee is working standard working hours, and the wage constitutes at least the amount of the national minimum monthly wage (€ 430 in 2020), but does not exceed the amount of two national minimum monthly wages.
  • The employment relationship has been established no earlier than 10 working days before applying for the financial support.

Main characteristics

The aim of this support instrument is to promote the regional mobility of employees, by providing financial support to cover the transportation and apartment rent costs during the first four months of the employment relationship.

The instrument is implemented in line with Cabinet of Ministers Regulation No. 75 of 25 January 2011, 'Regulations Regarding the Procedures for Organising and Financing of Active Employment Measures and Preventative Measures for Unemployment Reduction and Principles for Selection of Implementing Bodies of Measures'.

The state employment agency provides financial aid to the employee up to €600 to:

  • compensate the transportation costs to regularly commute from the declared place of residence to the work place and back;
  • compensate the costs for the rent of an apartment and transportation costs for one trip per month from the declared place of residence to the work place and back.

Funding for the state employment agency programme is partly provided from the state budget.

Funding

  • National funds

Involved actors

National government
Legal framework. Ministry of Welfare supervises the operation of the State employment agency. Funding for the state employment agency programme is partly provided from the state budget.
Public employment services
State employment agency provides services and administers funding.
Employer or employee organisations
Social partners participate in government consultations. The procedure of the ex-ante evaluation of the draft legislation act sets forth that draft legislation acts, when submitted for approval in the Cabinet of Ministers or national Parliament Saeima, should be supplemented by annotation, which informs about consultations that have been held with civil society and social partners.

Effectiveness

According to the Annual report of State Employment agency 288 people were supported by the measure in 2019; 252 in 2018; 243 in 2017; 161 in 2016 and163 in 2015.

In the 2019 OECD study 'Evaluating Latvia's Active Labour Market Policies', chapter 4 contains an evaluation of the programme 'Encouraging mobility and entrepreneurship in Latvia’s regions', for regional mobility. According to the study the programme was introduced in 2013, and the total number of participants approached 9,200 by the end of 2017. For 3,000 of these participants, the programme was provided under the Youth Guarantee. 

In the study the linear probability model is implemented in three versions, reflecting three ways to exploit the introduction of the programme or rule change for the impact evaluation. Model 1 compares the situation before and after the introduction of the programme for regional mobility in 2013. Model 2 compares the situation before and after the introduction of the programme for regional mobility under the Youth Guarantee in August 2014.  Model 3 compares the situation before and after a change in eligibility rules in March 2016. According to the study, the programme for regional mobility has positive overall effects on the mobility of unemployed people to take up a job. The study contains in depth analysis of the results. 

Strengths

No specific strengths are reported in OECD study. According to the study the introduction of the programme appears to have increased 'the probability that unemployed persons move in a particular month to take up a job by one-half'

Weaknesses

According to the OECD study 'Evaluating Latvia's Active Labour Market Policies', the financial support (€400) appears too low to cover the up-front costs where couples or entire family would have to move. Another weakness according to the study is the rule that unemployed people become eligible for support only after an unemployment duration of two months. Unemployed people whose mobility depends on financial support then either decline job offers during the first two months or postpone the new job until two months have passed, which needlessly prolongs unemployment and benefit payments from the state.

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