Lithuania

This paper lays out an approach, and a research agenda, for assessing the impact of carbon pricing on household budgets. It relies on a rich set of available data and policy models and combines them in a way that is informative for mapping the gains and losses at the household level in the short term as countries transition to a low-carbon economy. After accounting for direct burdens from higher fuel prices, indirect effects from higher prices of goods other than fuel, and households’ behavioural responses, overall burdens are only mildly regressive. Recycling carbon-tax revenues back to households allows considerable scope for avoiding or cushioning losses for large parts of the population, and existing policy models can be used to design compensation measures that facilitate majority support for carbon tax packages.

This policy brief was developed by the Secretariat of the OECD Network of Economic Regulators (NER) and is based on examples of practice submitted by members of the NER. It reviews emergency measures taken by economic regulators during the COVID-19 pandemic to ensure continuity of services in network sectors, as well as to adjust regulatory practices and adapt governance arrangements. It identifies long-term questions and implications of the crisis with regard to market structure, infrastructure investment and the role of regulators.

The effective use of skills in workplaces is essential to make the most of the skills that individuals possess. Better using skills can help to raise productivity and innovation for businesses, and help to increase wages and job satisfaction for employees. Public policy makers can work with employers to help create the conditions or provide direct support for strengthening skills use in workplaces. This chapter explains the importance of using people’s skills more effectively, how this could support Lithuania in achieving its strategic objectives, and provides an overview of relevant policies and practices. It then explores three opportunities for Lithuania to use skills more effectively: 1) enhancing the use of skills by supporting businesses to adopt high-performance workplace practices (HPWP); 2) strengthening management and leadership skills to drive the transformation of workplaces; and 3) empowering and engaging the workforce to make better use of their skills.

Lithuania has achieved a very high level of attainment in upper secondary education, with more than nine in ten of today’s young Lithuanians forecasted to complete their upper secondary education over their lifetime. Even so, there is scope for improvement. Upper secondary vocational education has struggled to increase its attractiveness to learners, and to provide them strong labour market outcomes. Upper secondary general education has permitted graduates to successfully continue their studies at the tertiary level. However, the matura examination, a high-stakes school leaving and higher education entry examination, creates incentives for teachers and students to focus principally on tested subjects within the upper secondary general education curriculum, and on the accumulation rather than application of knowledge. Moreover, with one high-stakes examination at the end of secondary studies, schools find it challenging to create steady and consistent incentives for learning across the entire course of the secondary studies. This chapter examines these challenges and identifies policy options to boost the attractiveness of the vocational offer and to align the matura examination with the competency-focused intended curriculum.

Lithuania is digitalising its economy with visible success, but much scope remains for the integration of advanced technologies. The COVID-19 crisis confirmed the importance of digitalisation to sustain activity. Increased private investment in innovation is essential to speed up digitalisation. The take-up of R&D tax incentives is low, however, despite relatively generous provisions, and many smaller firms have not been inclined to innovate. More effective public support for business R&D and stronger research-business collaboration on innovation are important. There is also a need to promote digital uptake, especially among smaller firms that lag behind. Improving access to equity finance for young innovative firms, reducing remaining gaps in digital infrastructure, along with better information on digital tools and how to use them, can help smaller firms digitalise. The public sector too has to become more digitalised. Addressing weaknesses in foundational skills through education reforms and responding more effectively to labour market needs for digital skills would enable a wider adoption of advanced technologies and higher productivity growth, while ensuring that the digitalisation dividends are distributed fairly. Increased participation in adult learning, especially among the less educated, is the way forward to adapt to increased job automation in the digital era.