Have the Baltic Countries Run out of Labour Reserves

Abstract

The aim of the article is to study both the magnitude and structure of internal labour reserves in the Baltic countries as well as to discuss potential policy measures that might help to activate these reserves. despite the record-high employment rates recently posted by Estonia, Latvia and Lithuania, considerable internal labour reserves can still be found in some population groups. Among upper-middle-aged men, low employment might reflect a low incidence of lifelong learning, inadequate digital skills and rapidly deteriorating health condition. Low employment of youth mirrors the low prevalence of apprenticeships. in Lithuania and Latvia, there is also a postponed entry of young women into the labour market. These internal labour reserves total more than 25,000 people in Estonia, 55,000 in Latvia and 85,000 in Lithuania, corresponding to 4-7% of the total employment. The recent outbreak of the Covid-19 pandemic may somewhat increase and change the structure of these labour reserves.