Author: Anna Pluta
Dzimumu atšķirības paredzamajā dzīves ilgumā Latvijā: iemesli un sociāli ekonomiskās sekas
Gender Gap in Life Expectancy and Its Socio-Economic Implications A new FROGEE policy brief on the situation in the region, containing an overview of the situation in Latvia written by Zane Vārpiņa (Stockholm School of Economics in Riga).
In Latvia women outlive men by approximately 10 years. The disparity is likely attributable to non-biological factors, such as behavioural risks and healthcare system issues. Men’s higher rates of smoking, alcohol consumption, and risk-taking behaviours, coupled with lower healthcare utilization, potentially exacerbate avoidable mortality. The brief suggests targeted public health policies and improved healthcare access to address preventable and treatable mortality, aiming to reduce the gender gap and improve overall life expectancy.
The full Report on the situation in Latvia is available here.
Reports from Belarus, Georgia and Poland are available here.
About FROGEE Policy Briefs
FROGEE Policy Briefs is a special series aimed at providing overviews and the popularization of economic research related to gender equality issues. Debates around policies related to gender equality are often highly politicized. We believe that using arguments derived from the most up to date research-based knowledge would help us build a more fruitful discussion of policy proposals and in the end achieve better outcomes.
The aim of the briefs is to improve the understanding of research-based arguments and their implications, by covering the key theories and the most important findings in areas of special interest to the current debate. The briefs start with short general overviews of a given theme, which are followed by a presentation of country-specific contexts, specific policy challenges, implemented reforms and a discussion of other policy options.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
BICEPS is contributing to the development of sustainable agriculture in Africa by leading the project “Building Digital Education of Indigenous/Heritage Crops for the Resilience of African Food Systems in the Climate Crisis” (2024-2025)
Building Digital Education of Indigenous/Heritage Crops for the Resilience of African Food Systems in the Climate Crisis
The project “Building Digital Education of Indigenous/Heritage Crops for the Resilience of African Food Systems in the Climate Crisis” aims to contribute to the development of sustainable agriculture in Africa, particularly in Ghana. Like other countries, Ghana is facing challenges caused by climate change that negatively affect food production. The project seeks to adapt Latvia’s experience in preserving and promoting heritage crops by creating a knowledge platform in Ghana. This platform will provide local farmers with insights into the cultivation and care of indigenous and/or heritage crops and emphasize the role of communities in maintaining such a knowledge platform in the long term.
The project aims to build a digital indigenous/heritage crop movement in the northern regions of Ghana to increase the resilience of African food systems to the climate crisis. The long-term goal of the project is to create self-sufficient indigenous/heritage crop communities in Ghana and other parts of Africa that can adapt to climate change and ensure food security in the future. This approach will promote the development of sustainable and resilient food systems, address the lack of information on indigenous/heritage crops and ensure effective knowledge transfer, which is particularly important in the context of climate change.
The project is led by the Baltic International Centre for Economic Policy Studies (BICEPS), in collaboration with the Latvian Permaculture Association (LPA), which will ensure the transfer of Latvian knowledge on working with heritage crops and the development of a community-based experience and knowledge sharing platform. The Savannah Agricultural Research Institute will be involved in the development of training modules focusing on indigenous crops suitable for Ghana. Meanwhile, the Ghanaian social enterprise Farmerline will use its Mergdata technology platform and interactive voice response system to transfer this knowledge to local farmers. It will adapt educational content into four local languages and disseminate it through mobile technologies, reaching up to 10,000 farmers.
During the implementation of the project, field studies will also be carried out to document Latvia’s development cooperation practices and provide lessons that will be useful internationally. It is also planned to work on academic publications on Latvia’s experience in development cooperation. Mutual learning will be important here, as Latvian partners and society can learn and adopt Farmerline’s knowledge on how to reach broad target groups in rural areas using mobile technology solutions.
The project has received development cooperation financing from the Ministry of Foreign Affairs of Latvia in 2024 and 2025.
Publication in the International Journal of Microsimulation
Congratulations to Konstantins Beņkovskis (Latvijas Banka, Stockholm School of Economics in Riga), Ludmila Fadejeva (Latvijas Banka), Anna Pluta (BICEPS) and Anna Zasova (UNU-WIDER, BICEPS) on the publication of their article “Keeping the Best of Two Worlds: Linking CGE and Microsimulation Models for Policy Analysis” in the International Journal of Microsimulation!
VoxEU column: Minimum Wage Policy and Labour Tax Evasion
Read a VoxEU column by Nicolas Gavoille and Anna Zasova: ‘Minimum Wage Policy and Labour Tax Evasion.’ Their analysis shows that increasing the minimum wage has a positive effect on tax rules enforcement. However, this comes at the cost of negatively affecting employment in tax-compliant firms exposed to the minimum wage hike.
The column is based on an article forthcoming in the Journal of Public Economics, written under the EEA-Norway grant project No S-BMT-21-8 (LT08-2- LMT-K-01-073). Access the full paper via this link: What we pay in the shadows: Labor tax evasion, minimum wage hike and employment
Pētījums atklāj minimālās algas paaugstināšanas ietekmi uz aplokšņu algām un nodarbinātību uzņēmumos, kas ievēro nodokļu noteikumus
Nesen Ir.lv publicētajā rakstā Nicolas Gavoille un Anna Zasova analizē minimālās algas paaugstināšanas sekas Latvijā. Viens no galvenajiem secinājumiem viņu darbā ir tas, ka minimālās algas paaugstināšana ne tikai samazina aplokšņu algas, bet arī samazina nodarbinātības līmeni uzņēmumos, kas ievēro nodokļu maksāšanas noteikumus.
Gavoille un Zasovas raksta pamatā ir pētījums, kas veikts EEZ un Norvēģijas granta finansētā projekta Nr. S-BMT-21-8 (LT08-2- LMT-K-01-073) ietvaros. Ar pilnu pētījuma tekstu var iepazīties šeit: What we pay in the shadows: Labor tax evasion, minimum wage hike and employment
BICEPS participates in the international ERA-NET project “City Tolls That Work” (2023-2025)
BICEPS, in cooperation with partners from Vienna University of Economics and Business, IT-company Dolphin Technologies (Austria) and Swedish National Road and Transport Research Institute, has successfully applied for the ERA-NET Cofund Urban Accessibility and Connectivity (ENUAC) third call titled “Innovations for Managing Sustainable Urban Accessibility”. The funding agencies from participating countries agreed to support our proposed research project “City Tolls That Works”. The respective local funding agency for this grant is the Latvian Council of Science.
The project aims to identify ways to improve public attitude toward road congestion tolls in cities. Most economists recognize city tolls as an effective policy measure to fight traffic jams and decrease the negative environmental impacts of car traffic in cities. However, unlike paid car parking, a transport policy measure that is present in almost every urban area in Europe, city tolls tend to face strong public backlash. Singapore, London, Milan, Stockholm and Gothenburg are noticeable exceptions of cities with working road congestion pricing. Public acceptability of the pricing mechanism is low mainly due to concerns that tolls lack fairness, affecting some population groups more negatively than others. Such public resistance makes the idea of city tolls de facto non-operational – there was no progress in the introduction of road congestion tolls in European cities over the past decade. This motivates our search for road tolling schemes that can really work in cities, i.e., that make cities more accessible and sustainable, while also being perceived as fair and having broad public support.
To succeed, one first needs to gain a solid understanding of what population groups actually benefit and lose under existing city tolls and why. Project’s Swedish partner will use unique real-world congestion pricing and registry data of the full Swedish population to acquire new insights on long-term distributional effects of city tolls. These will inform our project further, as BICEPS will propose and measure public support in Riga and Vienna (together with the Austrian partners) for innovative road-pricing schemes, including one with a cash-back component, in which collected tolls are returned directly back to drivers in the form of public transport tokens. BICEPS will then support Austrian partners that will design and implement a field experiment in Vienna that measures behavioral reactions to such novel pricing instruments.
The research consortium is led by Vienna University of Economics and Business. The project period runs from April 2023 until October 2025. Sergejs Gubins is BICEPS senior researcher associated with the project.
Publication in the International Migration journal
Congratulations to Zane Vārpiņa, Marija Krūmiņa, Kata Fredheim, and Anders Paalzow on the publication of their article “Back for business: The link between foreign experience and entrepreneurship in Latvia” in the International Migration journal!
Link to publication (open access)
Abstract
Research shows that return migrants have a higher propensity to set up an entrepreneurial activity or be self-employed compared to non-migrants. We take a multidisciplinary approach and empirically study the case of Latvia as a migration donor country to learn how re-migrants participate in entrepreneurship back at home. We are interested if return migrants can be seen as a vehicle for entrepreneurship development and if it is worth looking at them as agents of business growth and innovation. Not only we measure the fact of being entrepreneurial but also explore sources that contribute to the higher propensity, attitudes to creating own business venture, level of ambitions and population sentiment towards entrepreneurs. Based on a nationally representative adult population survey of 8000 observations, we find that early-stage entrepreneurial activity, established business ownership as well as intrapreneurship for return migrants exceed that of the non-migrant population. The self-perceived capabilities to start business is higher for those who have lived abroad, and fear of failure is lower. Return migrants also have better business networks and higher growth and export ambitions. Latvian return migrant entrepreneurship is not necessity driven but rather motivated by opportunities. Migration experience, length of stay aboard and capital accumulated abroad are found to be significant predictors of probability to become entrepreneur when controlled for socioeconomic and personal factors.
New working paper “Keeping the best of two worlds: Linking CGE and microsimulation models for policy analysis”
Authors: Konstantīns Beņkovskis (Bank of Latvia), Ludmila Fadejeva (Bank of Latvia), Anna Pļuta (BICEPS) and Anna Zasova (BICEPS)
Abstract
In this paper, we link a CGE model with the tax-benefit microsimulation model EUROMOD for Latvia. The model linkage is done using an iterative top-down bottom-up approach, ensuring the convergence of changes in disposable income, employment and wage in both models. We also incorporate the unreported wage payments in CGE and EUROMOD to account for the substantial labour tax non-compliance in Latvia and improve the modelling of the fiscal sector. Several simulations demonstrate the advantages of the joint CGE-EUROMOD system over the individual macro and microsimulation models. The lack of income distribution aspect and the scarcity of fiscal instruments in CGE can be overcome by the features of EUROMOD. The CGE model, on the other hand, provides macroeconomic spillovers that are missing in the simulations of EUROMOD.
Keywords: EUROMOD, CGE model, model linkage, informal sector
JEL codes: C68, D58, D90, J46
Minimum Wage Spike and Income Underreporting
Abstract
The labor markets of many transition countries are characterized by two features: a spike at the minimum wage level in the wage distribution and widespread use of so-called envelope wages, i.e. non-declared cash payments in addition to the official wage. In this brief, we present a body of suggestive evidence showing that tax evaders are overrepresented among minimum wage earners in Latvia.
Read the full policy brief on the FREE Policy brief website.
Global2Micro Project in 2022
As the year 2022 comes to a close, we can look back on a successful second year for the Global2Micro project.
This year, we participated in a number of conferences and seminars, including the European Economic Association conference in Milan, the Bank of Latvia’s expert talks, the IAAEU’s 14th Workshop on Labor Economics, the 21st LAGV conference, and a research seminar at the Kyiv School of Economics.
We have also finalized and submitted our paper, What we pay in the shadow: Labor tax evasion, minimum wage hike, and employment to a journal, and have begun work on a new paper that studies firm reaction to tax audits.
Furthermore, as a result of our work with data, Latvia will be included in the next releases of the CompNet database.
As we enter the final year of the project, we are excited to continue our work and bring it to a successful conclusion at the end of 2023. Thank you to all our colleagues whom we cooperated with along the way.