Synergy of the Amount of Old-age Pensions and Economic Development in Latvia

The research hypothesis is that there is a synergy between the average amount of old-age pensions and the economic development of a territory in Latvia. The research aim is to identify a correlation between the average amount of old-age pensions and economic development in Latvia. In the research period 2004-2010, there was a positive trend regarding the average amount of old-age pensions in the entire Latvia and its regions - the average amount of old-age pensions increased, yet the amount of pensions is too small to provide effective government support to pensioners. According to the results of cluster analysis and ranking, 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 municipalities and cities of Latvia. A high level of economic development, except the country's capital city, is also observed in three cities - Ventspils (Cluster 2), Valmiera (Cluster 3), Liepaja (Cluster 4) as well as the municipalities closely located to the country's capital city (Carnikava, Ikskile, Stopini, Cesis, etc.). A lower level of economic development is observed in municipalities in Latgale and Zemgale regions and in small, in terms of territory, municipalities in Kurzeme and Vidzeme regions. The average amount of old-age pensions in the clusters of higher level of economic development and in the municipalities located next to the capital city is greater than in the clusters of lower level of economic development; therefore, a synergy exists between a territory's economic development and the average amount of old-age pensions.