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    About the ILO in Lithuania

    High inequality spoils bliss of strong economic growth

    After regaining its independence in 1990, Lithuania embarked on a major economic transition from command to social market economy. This contributed to a catching-up towards the living standards in the European Union. The country’s EU membership in 2004 further helped to promote convergence. Lithuania’s per capita income is today at more than 80% of the EU average.

    Labour markets benefited from these developments. The employment rate stands at over 78%, above the EU average, while unemployment fell to 6% in 2019. Youth unemployment and long-term unemployment are below the EU average. The shrinking population remains a major bottleneck to growth. Lithuania’s population has fallen by nearly 25 % since the early 1990s due to high emigration and adverse demographic trends. Although net migration turned positive in 2019, the outflow of skilled labour continued, limiting the potential for growth. The shortage of workers has been growing in recent years while labour costs have increased considerably. Immigration from non-EU countries increased in 2019. Continue reading