Human Capital at the Regional Level: Population Forecast Insights into Latvia from a Long-Term Perspective

Abstract

To remain prosperous and competitive, modern regions must meet the challenge of becoming smart and sustainable, and human capital has a key role in this context. Depopulation increases risks of human capital availability and emigration is a primary reason. Regions that are experiencing a decreased population must develop strategic sustainable regional development policies that consider scientifically based population forecasts. The youth population characterises regional potential for long-term human capital availability. First, children represent a region’s future employees and entrepreneurs. Second, children require availability of educational services at regional level, which promotes regional vitality. Third, the youth population indirectly demonstrates a region’s socio-economic attractiveness for living and working. This study employs the system dynamic method to forecast different population change scenarios at the regional level in Latvia. The results reveal a declining, long-term population tendency for working age and youth populations in Latvian regions. Overall, Latvian regions will remain extremely homogeneous in the long term, with minor differences in the short term. In conclusion, despite regional disparities in terms of quality of life with some leading examples, all regions will experience high emigration loss. Regional social, economic and environmental characteristics demonstrate a need to assess population change trends in a complex manner. This study provides data for understanding short- and long-term perspectives that must be addressed through sustainable regional development policies. Received: 27 October 2023 / Accepted: 24 March 2024 / Published: 5 May 2024