Abstract
Research hypothesis: a synergy exists in Latvia between the average amounts of state social security benefits and the regions’ economic development. The research aim is to identify interaction between the average amount of state social security benefits and economic development in Latvia. The synergy between economic development and the average amount of security benefits, which was identified in this paper, can be regarded as a research novelty. Latvia’s social safety system includes state social insurance, state social benefits, social services, and social assistance that are financed from both the central government’s basic budget and special budget and the budget of local governments. Latvia’s social insurance includes state pensions and state social security benefits. In accordance with Latvia’s legislative acts, its state social security benefits are classified into two groups: unemployment benefits and maternity and sickness benefits. The present research showed that the average amount of state social security benefits gradually increased in the regions of Latvia in the period 2005-2009. The increase in the amount of benefits is related to an increase in wages, an increase in and the legalisation of employment, as well as amendments to legal acts of the Republic of Latvia. To compare economic development levels according to various indicators in Latvia’s districts, a cluster analysis was performed. For the cluster analysis, 11 statistical indicators were selected. A cluster analysis showed that a monocentric economic development trend is specific to Latvia, as a result of which there are significant differences between Latvia’s capital city of Riga and the other districts of Latvia (a unit of administrative and territorial division in Latvia till the middle of 2009). The economic development level in many Latvian border districts (Aluksne, Balvi, Gulbene, Kraslava, Ludza, Valka) is low, as a result of which the socio-economic differences increase and differences in the average amounts of social security benefits paid in Latvian regions increase. According to the research results, there are interactions – synergies – among the amounts of unemployment, maternity, paternity, and parental benefits, the distance of districts to the country’s capital city, as well as the economic development level of districts. DOI: http://dx.doi.org/10.5755/j01.eis.0.5.1077
Highlights
After comparing the average values of Clusters 2 and 1, one can conclude that there is a significant difference pointing that the economic development level in the capital city is much higher than in the districts included in Cluster 2
The authors compared the results of cluster analysis with the average state social security benefits paid in 2008 and
After comparing the results of cluster analysis with the average unemployment benefit, one can conclude in general that the amount of this benefit is larger in the clusters of higher economic development level than in those of lower economic development level
Summary
In avoiding social tension and in ensuring the wellbeing of society, an important role is played by the capacity of social security system and sustainable development that protect individuals in case of social risk and provide disabled individuals with means of existence.To provide a sustainable social security system in Latvia, maintaining its financial stability and fostering its development as well as achieving the society’s better understanding of the role of social insurance system were set as the key tasks to be solved in the “National Development Plan 2007-2013”.After analysing the amounts of state social security benefits in Latvia and its regions during 2005-2009, Mistre B.and Dobele A. emphasise that there are significant differences among these benefit amounts in various Latvian regions (Mistre B, Dobele A., 2010).Social insurance problems, including changes in the amount and number of social security benefits, were revealed in several studies conducted by the Ministry of Welfare (AnOptimal Tax .., 2007; Cunska Z., Muravska T, 2008; NationalStrategy Report .. , 2008).presently in Latvia, few studies on the synergy of amounts of social security benefits and economic development, which is a complementary precondition for sustainable development in its regions, have been done.the synergy between economic development and the average amount of security benefits, which was identified in this paper, can be regarded as a research novelty. According to the research results, there are interactions – synergies – among the amounts of unemployment, maternity, paternity, and parental benefits, the distance of districts to the country’s capital city, as well as the economic development level of districts.
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