Abstract
To mitigate the impact of the 2008–2010 global financial crisis on vulnerable households, the Government of Latvia established Workplaces with Stipends, an emergency public works program that targeted registered unemployed people who were not receiving unemployment benefits. This paper evaluates the targeting performance and welfare impacts of the program. The paper employs a quasi-experimental estimation strategy and analyzes a unique household survey. The authors find that the Latvian public works program was successful at targeting poor people, and leakage of benefits to non-poor households was small. Using propensity score matching, the authors find that the program’s stipend mitigated the impact of job loss and raised participating household incomes by 37 percent relative to similar households not benefiting from the program. The paper also finds that the forgone income for this program was less than forgone incomes estimated in other countries. I38, J64, J68
Highlights
Latvia was one of the hardest hit countries in the world during the 2008–2010 global financial crisis; during 2008–2010, Latvia’s gross domestic product (GDP) contracted by 21 percent
Between 2008 and 2009 alone, Latvia’s GDP contracted by 18 percent (Figure 1a)
We focus on data from the registered unemployed population from two strata within each region: Strata 1: people enrolled in the emergency public works program (Treatment) Strata 2: people on the waiting list for the emergency public works program (Control) A random sample of 1,166 people was drawn from Strata 1 (Treatment) and a random sample of 1,016 people was drawn from Strata 2 (Control)
Summary
Latvia was one of the hardest hit countries in the world during the 2008–2010 global financial crisis; during 2008–2010, Latvia’s gross domestic product (GDP) contracted by 21 percent. During 2009 alone, GDP contracted by 18 percent (Figure 1a). Poverty rates increased by eight percentage points - from 10.1 percent in 2008 to 18.1 percent in 2009 (Ajwad et al 2012). Net job creation was negative as layoffs rose sharply. Between 2008 and 2010, 126,000 jobs were lost, equivalent to 11.2 percent of the precrisis workforce. In 2008 Q3, unemployment rates began to rise and reached a peak of about 21 percent in 2010 Q1, compared to about six or seven percent in the pre-crisis 2007–08 period (Figure 1b)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
