Abstract
From 2004 till mid-2007, the economics of Latvia experienced fast development, which to some extent was influenced by accessing the European Union (EU), which in its turn provided access to the EU funds and subsequently to significant investment in the country’s development, thus also affecting the topicalities of social security and employment. Because of the world recession, the EU has experienced an economic downfall which hit Latvia and its regions very hard, causing a significant reduction in the economic activity, increase in the unemployment level, and the risk of social stratification. To facilitate the socio-economic development of the regions, to increase the level of welfare in the regions with lower socio-economic development indicators, as well as to prevent the possibility of appearance of unfavourable situations in the future, it is necessary to use correctly the EU funds available in Latvia, including the financing of the European Social Fund (ESF). In the period from 2004 till 2010, the Riga region has acquired 33% of the total ESF financing in the welfare sector, Latgale has the second largest financing - 25%, but the other resources have been acquired in a more or less equal amounts in the other regions: Kurzeme (16%), Zemgale (14%), and Vidzeme (12%). The ESF financing in the welfare sector has influenced the socio-economic indicators of the regions. Functional correlations are observed among the ESF financing in the welfare sector and the value changes in the number of registered unemployed persons, job seekers and the territory development index.