Foto: BB.LV / старики в пансионате
Moreover, Latvia has the largest difference in poverty risk between children under six years old and individuals over 75 years old. "The economy is developing, reducing the number of people at risk of poverty. However, there are still many problems. The structure of the economy is changing, and there is a constant demand for new knowledge and skills. Rapid demographic changes also create conditions for young people to have a relative advantage in the labor market. This is evidenced by the fact that wage levels begin to decline after reaching the age of 50. In addition, the Baltic countries stand out in the European context in that the wages of the younger generation exceed those of the older generation. This can be explained by both fewer opportunities in the labor market and other factors, such as health status," says economist Dainis Gašpuitis. "Latvia is in a difficult situation as it needs to finance the incomes of current pensioners while creating better conditions for new generations who will have to finance this system. If the state allocates too many resources to pensions and other benefits, there will be a shortage of funds for education, childcare, and family support. If pensions remain low, poverty may lead to increased healthcare and social care costs, as well as a decrease in trust in the social insurance system. There is a risk of a vicious circle, which imposes the obligation to make balanced and adequate decisions," says the economist. The main factors are economic development, employment growth, longer and healthier working lives, reduction of the shadow economy, and a sustainable pension system.
