Socio-Economic Situation in Latvia's Municipalities in the Context of Administrative-Territorial Division and Unexpected Impact of COVID-19

Abstract

In this research, the authors analysed how the behaviour of people changed in various phases of the COVID-19 pandemic and how these changes affected the economic activity in municipalities, taking into consideration significant changes in people’s habits and employment conditions. The pandemic coincided with the administrative-territorial reform in Latvia, providing a unique opportunity to test and ascertain in a single research both the above-mentioned changes in the economic activity of inhabitants and the viability of the new administrative-territorial division vis-a-vis the new reality. The developed regional planning methodology based on the mobile phone activity data and socio-economic indicators (set of indicators provided by regional development state institutions) is used to categorize the 43 newly formed municipalities into similar groups. It is concluded that the aggregated indicators have a significant impact on the division of municipalities: Inhabitants, Dynamics indicator, Economic development level, Mobile phone activity on workdays, holidays and weekends.