Why Residents of Latvia Work Less: The Country Lags Behind Estonia by More Than Three Years

Photo: Unsplash

The retirement age in Latvia, Lithuania, and Estonia is the same — 65 years. However, residents of Latvia spend less time in the labor market on average than their neighbors, with one of the main reasons cited by experts being the health status of the population.

Latvia ranks last among the Baltic countries in terms of expected working life. According to Eurostat, a resident of the country will work an average of 38.1 years, writes Diena.

In comparison, this figure is 38.6 years in Lithuania and 41.5 years in Estonia. Meanwhile, the average across the European Union reaches 37.5 years, meaning Latvia still slightly exceeds the European average.

Expected working life reflects how many years a person is expected to remain economically active. The calculation takes into account not only the retirement age but also life expectancy, employment levels, and other factors affecting people's participation in the labor market.

According to Baiba Rozentale, the client relations manager at Biuro, this indicator is influenced by a whole range of reasons. Among them are the health status of the population, opportunities for education and retraining, as well as the willingness of employers to hire and retain older employees.

In her assessment, the labor market is gradually changing: whereas previously the age of a candidate often played a decisive role in hiring, employers are now increasingly focusing on experience, professional skills, and the ability to perform specific tasks.

For Latvia, this issue is particularly significant against the backdrop of population decline and labor shortages. The longer people can remain in their professions, the less pressure there is on the labor market and the pension system.

SEB bank economist Dainis Gašpuitis notes that the shorter working life in Latvia is largely related to high mortality rates among working-age individuals and health issues. According to him, residents aged 55 to 64 often leave the labor market prematurely due to illnesses, lack of necessary skills, or unsuitable working conditions.

Thus, although the formal retirement age in the Baltic countries is the same, residents of Latvia work less on average. Experts believe that increasing the duration of healthy working life will become one of the important tasks in the context of an aging population and labor shortages.