Latvia: Welfare Reform in the Context of EU Accession and Emigration of the Working-Age Population

This chapter examines Latvia’s welfare state reform record since the early 2000s, focusing on its fragmented progression in the context of European Union (EU) accession, adverse demography, and emigration. While Latvia has features of a liberal welfare regime, such as low public spending and meagre social protection, it also exhibits elements of social investment, particularly in education and family policies. These characteristics reflect the interplay between neoliberal domestic policy orientations, historical legacies—most notably the euro crisis and external influences, including EU directives and funding. The chapter analyzes key reforms in pensions, family policy, and minimum income schemes. Pension reforms during the Great Recession illustrate the austerity consensus among Latvia’s political elite, prioritizing fiscal consolidation over social adequacy. Family policy advancements, notably in parental leave and childcare benefits, were propelled by a small nationalist coalition party, reflecting a policy agenda focused on demography. Meanwhile, improvements in minimum income schemes were driven by external interventions from the Constitutional Court and the European Commission, rather than by domestic political will. Latvia’s welfare state remains constrained by a weak carrying capacity due to unwavering emigration, which makes assuming higher welfare commitments to social protection buffers riskier. Consequently, policymakers favour investments in skills for the young over fighting traditional risks like old-age poverty.