The aim of the article is to clarify the effect of higher education on economic development of Latvia. As a result of the research, measures that shall be implemented, so that by 2020 the situation in the supply of higher education programmes should be relevant to the labor market requirements and should not cause deficit or surplus of specialists of certain professions, will be developed. In the research, methods such as document analysis and statistical research method were used. The information collected shows that a set of measures implemented so far is not sufficiently effective to promote the attractiveness of higher education in a number of technical specialties, although the employment rate among people with higher education is significantly higher than those with primary, secondary or vocational education. In today`s situation, the distribution of the number of students of higher education institutions among education programmes has a higher proportion in social and humanitarian sciences than in engineering sciences that in the future will lead to deficit of certain professions on the market. The situation is largely related to the acquisition of higher education as long-term intellectual investments and the size of the average wage in these sectors in the country