the share of workers with higher education is growing

There are only bosses around

Data from the Central Statistical Office (CSO) show that at the beginning of 2023, of the 806,000 employed persons aged 25 years and over in the Latvian labor market, 42.7% had a higher education, which is 0.7 percentage points more than in the previous year .

Of these, 24.5% had a master’s degree, 13.9% had a bachelor’s degree, 3.6% had a higher education, and 0.7% had a doctorate.

At the same time, at the beginning of 2023, 37.1% of the employed population had secondary education. Another 13.5% of the employed population received post-secondary vocational education, 6.4% received primary education, and 0.3% of workers had primary education.

At the beginning of 2023, 45.1% of workers aged 25 years and older were managers and specialists, 21.4% were skilled workers, 20% were office, service and sales workers. The least number – 12.7% – worked in simple professions.

The share of employed persons with higher education increased by 1.1 percentage points among specialists, reaching 60% at the beginning of 2023, but decreased by 0.6 percentage points among managers and amounted to 70%, as well as among senior specialists, amounting to 86.4%. .

The share of employed persons with higher education among office workers did not change significantly – from 41.8% in 2022 to 41.9% in 2023.

Simple professions are not in fashion

The share of the employed population with higher education among skilled workers in agriculture, forestry and fisheries increased by 1.5 percentage points, reaching 4.1%. At the same time, the number of employed persons who received higher education in the professions of the National Armed Forces increased by 0.3 percentage points – from 39.5% in 2022 to 39.8% in 2023, as well as in the professions of plant and machine operators and assemblers – from 8.9% to 9.2%.

The data also shows that the share of the population employed in simple occupations with basic and lower education fell by 0.4 percentage points, from 16.3% in 2022 to 15.9% in 2023, while those with higher education in this group of professions there is an increase in the share of employed persons – from 10.6% to 11.3%.

Better education means more work

Among the population aged 25–64 years at the beginning of 2023, the highest employment rate was observed among those with a doctorate degree – 91.9%, with higher education – 85.6%, with a master’s degree – 84.5% and with a bachelor’s degree – 82.7%. The lowest employment rate in this age group (9.2%) was recorded among those with no schooling or less than primary school.

The reasons for lack of education can be different – health problems or disabilities, personal or family circumstances, indicate the statistical bureau. Among the population with primary education, 36.7% were employed, with primary school education – 52.3%, with secondary education – 66.4%, with vocational education following secondary education – 72%.

After reaching the national retirement age (64 years and three months), a similar trend continues – among those who received higher education, more are employed: 48.5% of those who have a doctorate and 46.9% of those who received a higher education education and continued to work. After reaching retirement age, 38.6% of workers with a bachelor’s degree and 29.2% with a master’s degree continued to work.

Upon reaching retirement age, the population with no school education or less than primary education has a lower employment rate – 2.3%, with primary education – 3.7%, with basic education – 9%, with secondary education – 18.8%, professional – technical education following secondary education – 22%.

Different scenarios

It is well known that the Latvian labor market is spoiled by too high labor taxes. All employers complain regarding this. Recently, the Ministry of Finance presented a dozen scenarios for possible changes in the labor tax system. Here are some of them.

— Introduction of a fixed non-taxable minimum from the first year and a more progressive application of personal income tax rates (PIT).

— Gradual introduction of a fixed non-taxable minimum over five years and an increase in the second PIT rate while simultaneously increasing the thresholds for the application of PIT.

— Differentiated increase in non-taxable minimums and the second PIT rate with a simultaneous increase in the thresholds for the application of PIT.

— Introduction of a fixed non-taxable minimum gradually over five years while maintaining other indicators unchanged.

— Gradual introduction of a fixed non-taxable minimum of 500 euros over five years, keeping other indicators unchanged.

— Introducing a fixed non-taxable minimum of 500 euros gradually over five years and increasing the threshold for applying PIT.

— Gradual introduction of a fixed non-taxable minimum over five years until reaching 70% of the minimum wage without changing other indicators.

— Gradual introduction of a fixed non-taxable minimum over five years until reaching 70% of the minimum wage, as well as increasing the threshold for applying personal income tax.

— Set a fixed non-taxable minimum in the first year at 500 euros, set one PIT rate of 25% and abolish the solidarity tax.

— The gradual introduction of a fixed non-taxable minimum over three years with a simultaneous increase in the second PIT rate and the preservation of the solidarity tax and the redirection of the previous part of the PIT in the amount of 10 percentage points to finance health care.

The minister waits by the sea for taxes

It cannot be said, however, that the authorities are enthusiastically ready to lower taxes. Time, they say, is not right; less money is now flowing into the treasury. However, when more and more were received, this issue was also not discussed.

“The desire of employers to improve the system of labor taxes in the Baltics is well understood. However, we must take into account the fact that equalizing the tax burden on labor requires significant funds. Whether we can afford this now will be shown by fresh tax revenue forecasts. In June we plan to achieve agreement on possible scenarios for changing labor taxes in the working group, taking into account the macroeconomic scenarios for the country’s development,” said the Minister of Finance of the Republic of Lithuania Arvils Asheradens.