European skills index 2020
The European Skills Index (ESI) is Cedefop’s composite indicator measuring the performance of EU skills systems. The ESI measures countries’ “distance to the ideal” performance. This ideal performance is chosen as the highest achieved by any country over a period of 7 years. The ideal performance is scaled to be 100 and the scores of all countries are then computed and compared to that.
The ESI consists of three pillars; skills development, activation and matching, each of which measures a different aspect of a skills system.
Basis of the ESI are 15 individual indicators from various international datasets. The scores are calculated across countries at the indicators’ level. The scores are then averaged at the various layers and finally the Index score is formed. To illustrate, an Index (or pillar, sub-pillar etc.) score of 65 suggests that the country has reached 65% of the ideal performance. Thus, there is still 35% (100-65) room for improvement. A score of 100 corresponds to achieving the ‘frontier’, that is an aspirational target performance for that indicator. A score of 0 corresponds to a lowest-case performance.
Latvian ESI 2020 and comparison to 2018
In ESI 2020 Latvia has scored 66 and ranks 12th of 31 countries which places it above the median and allows to conclude that the skills system is fairly balanced but there is still room for improvement. There is already a positive tendency as in ESI 2018 Latvia scored 59 and ranked 14 out of 28 countries.
Comparing the three pillars of ESI 2020 in Latvia, Skills Activation exhibits the highest score, equal to 81. The lowest performance is on Skills Development with a score equal to 57, and Skills Matching has a slightly higher score of 62.
The pillar Skills Activation consists of two sub-pillars and Latvia has achieved equally very high scores in both – labour market participation (82) and transition to work (80). In comparison to ESI 2018, Latvia has made an impressive improvement on these sub-pillars (increasing the scores from 72 to 82 and from 58 to 80, respectively) which has also contributed significantly to the increase of the overall score. These improvements can partly be explained by the situation in the labour market and the steadily declining unemployment rate. They also show that the policy measures for drop-out prevention and support for NEETs have been fruitful and should be continued. However there is still room for improvement, for example, in the transition to work of recent graduates by strengthening their practical skills and attracting students to professions with labour shortage.
Regarding the pillar Skills Development Latvia ranked above average (14th, score 57) mainly due to high scores in upper secondary attainment and pre-primary pupil-to-teacher ratio (7th on sub-pillar Basic education). However, for the other sub-pillar Training and other education the Latvian performance is below average and indicates the necessity to further strengthen these aspects which is in line with the current policy priorities. In order to increase the participation in VET it is crucial to continue improving the quality, attractiveness and labour market relevance of VET. During the last decade, comprehensive reforms have been implemented aiming at modernization of VET schools and VET curricula, e.g. modularization of VET programmes, introduction of EQAVET criteria, implementation of work-based learning and other policy initiatives.
On the third pillar Skills Matching Latvia has achieved average results and is ranked 15th (score 62). However, there is a slight improvement in comparison to ESI2018 in the score on this pillar and its sub-pillars. This is mostly due to relatively low rates of long-term unemployment and a decrease of underemployed part-time workers (they work part-time not being able to find full-time work), both indicators are influenced by the situation in labour market. The second sub-pillar Skills Mismatch has slightly improved as well (from score 50 to 53) due to decreased qualification mismatch (underqualification and overqualification). However, the high share of low waged workers (score 17 also in ESI2018) is the lowest performance in this pillar and sub-pillar and indicates the need for policy initiatives aiming at wage growth in high-demand occupations. Overall, skills mismatch could be tackled by further development of responsiveness of education and training to the labour market, involvement and cooperation with employers, for example, through strengthening work based learning and extending this approach to higher education.
More information on Latvian ESI scores: https://www.cedefop.europa.eu/en/publications-and-resources/data-visualisations/european-skills-index/country/latvia?year=2020
European Skills Index:
https://www.cedefop.europa.eu/en/events-and-projects/projects/european-skills-index-esi