2000年-世界发展银行全球_The_Republic_of_Latvia___Poverty_Assessment_Volume_1_35页_2mb

Latvia Poverty Assessment Summary

Core Content

This report provides a comprehensive analysis of poverty in Latvia during the transition from a planned to a market economy, focusing on three key areas: the characteristics of the poor, the functioning of the labor market, and the role of social transfers in poverty alleviation. It is based on data from the 1997–1998 Household Budget Survey (HBS) and the Labor Force Survey (LFS), and it is part of a broader poverty reduction strategy supported by the World Bank and other international organizations.

Main Points

1. Who Are the Poor?

• Poverty Levels and Inequality:

  • The main measure of welfare is household per capita consumption, derived from the HBS.
  • In 1998, the average monthly per capita consumption was about 62 lats ($107 at the time, or $202 at 1993 international prices).
  • Regional differences are significant: per capita consumption in Riga is 41% higher than in rural areas.
  • The Gini coefficient for per capita consumption is 34, and for per capita income is 32, indicating relatively stable inequality since 1995.
  • Inequality in Latvia is lower than in other FSU countries but higher than in 1989.
  • The poverty line is set at 28 lats per person per month, equivalent to about $3 per person per day at 1993 international prices.
  • Using per capita measurement, 19.4% of people are poor, but this rate decreases with economies of scale: 11.0% with moderate economies of scale and 5.9% with very sharp economies of scale.

• Regional Poverty Differences:

  • The Riga region has the lowest poverty rate at 12.6%, while Latgale has the highest at 30%.
  • Rural areas have a poverty rate exceeding 28%, with about 45% of all poor in Latvia living in rural regions.

• Factors Associated with Poverty:

  • Household Size: Larger households are generally less poor, but this effect diminishes with economies of scale.
  • Children vs. the Elderly: With sharp economies of scale, there is no significant difference in poverty rates between households with children and those with the elderly. However, with per capita measurement, households with children are more likely to be poor.
  • Gender: Female-headed households have 7–8% lower welfare than male-headed ones. Elderly women are more at risk of poverty than elderly men, likely due to the loss of a partner.
  • Labor Force Status: Unemployed households have a poverty rate of 38.5%, twice the national average.
  • Education: Higher education is associated with 24% higher per capita consumption. Secondary education benefits men more than women, with a 23% wage premium for men.
  • Location: Rural households have welfare levels about 8% lower than urban ones. Regional differences are also evident, with households in Latgale having 5% lower welfare than those in Kurzeme.

2. How the Labor Market Functions

• Determinants of Earnings:
  • Education has a strong impact on earnings. High education increases per capita consumption by 24%.
  • Secondary education only benefits men, who earn 23% more than those with only primary education.
  • Vocational education does not offer a significant benefit over primary education for either gender.
  • Age and Earnings: Earnings increase with age up to a peak (34.5 years for men, 38.4 years for women), then decline. This pattern is steeper for women, reflecting lower pay for young and elderly women.
  • Gender Discrimination: On average, men earn 24.8% more than women. Using Oaxaca decomposition, this differential is attributed to gender discrimination, which is estimated at 27.2% if men's earnings are the standard, and 29% if women's earnings are the standard—levels similar to those in the United States.
  • Ethnic Discrimination: Russians earn 2.4% less than Latvians on average, but if paid according to Latvian human capital characteristics, they would earn 7.9% more. Therefore, they are paid 5.5% less than they should be, indicating discrimination.
  • Regional Effects: Urban areas offer higher earnings than rural areas. Men in Riga earn 14% more than men in other urban areas, while women in Riga earn wages statistically indistinguishable from other urban areas.

3. Social Transfers, Social Assistance, and Poverty

• Social Assistance System:
  • Social assistance is a key component of poverty reduction. The report focuses on who receives it, the amount of leakage, and the reasons for exclusion.
  • The notional poverty line is 26 lats per capita per month, but most social assistance offices use a higher line (28–35 lats).
  • Social assistance reaches the neediest groups, but there are issues with leakage and exclusion, particularly in rural areas.
  • Regional Inequality in Social Assistance:
    • There is significant regional disparity in the distribution of social assistance. Rural areas receive less support compared to urban areas.
    • The report highlights the need for better targeting and distribution mechanisms to reduce regional inequality.

Key Information

• The poverty assessment is based on data from the 1997–1998 HBS and LFS.
• The report uses different poverty lines based on economies of scale to provide a more accurate picture of poverty incidence.
• It emphasizes the importance of gender and regional disparities in poverty and labor market outcomes.
• Social assistance is a critical tool for poverty reduction, but it faces challenges in targeting and regional distribution.
• The analysis supports the need for structural reforms, including improving the social safety net, enhancing the private sector, and strengthening regional development policies.

Policy Recommendations

• Improve the targeting and efficiency of social assistance to reduce leakage and ensure it reaches the most vulnerable.
• Address regional inequality in social assistance delivery.
• Enhance the role of local governments in managing social services and regional development.
• Promote better corporate governance and judicial reform to support economic stability.
• Continue to focus on education and labor market reforms to improve employment prospects and reduce income inequality.