Lithuania

GDP per capita in Lithuania rose from one third to two thirds of the OECD average level between 1995 and 2014, despite internal and external crises. Productivity catch-up was critical to this process, although the level of labour productivity also remains around one-third below the OECD average. Further productivity gains will partly rely on improvements in resource allocation. In particular, the Lithuanian government should promote better governance of state-owned enterprises, more effective bankruptcy procedures and new forms of business financing. However, convergence will also require policy settings that encourage advances in within-firm productivity growth. Improvements to the quality of education at all levels and increasing the role of workplace training will be important. So too will be further measures that support the innovation capacity of the business sector, including innovation policies that promote the absorptive capacity of firms and do not favour incumbents at the expense of young businesses. This Working Paper relates to the 2016 OECD Economic Survey of Lithuania (www.oecd.org/eco/surveys/economic-survey-lithuania.htm)

In 2015 the Lithuanian government launched an ambitious Social Model reform agenda aimed at balancing flexibility of the labour market and security provided through the system of social protection. We simulate alternative scenarios for reforming the unemployment benefit and cash social assistance systems in Lithuania. We first analyse a reform of the social insurance unemployment benefit along the lines currently proposed by the Lithuanian authorities within the new “Social Model”. The social assistance reforms were left outside of the Social Model. However, social assistance, as currently designed, has strong negative effects on the work incentives of the recipients. We construct and consider several reform scenarios: extending the current system of in-work payments; establishing earnings disregards; and modifying the equivalence scale for family. We look at the effects of reforms on financial incentives to search and accept a vacancy as measured by the share of additional income that is taxed away through direct taxes, social insurance contributions or through benefit withdrawal when increasing labour supply (effective marginal tax rate). We also investigate the impact of reforms on poverty, income distribution as well as their first-order financial costs. We use microsimulation techniques applied to a representative sample of Lithuanian households. Our simulations are carried out using EUROMOD –a static tax-benefit microsimulation model developed for the European Union. The model uses micro-data from the 2012 Lithuanian component of the European Union-Survey of Income and Living Conditions (SILC). This Working Paper relates to the 2016 OECD Economic Survey of Lithuania (www.oecd.org/eco/surveys/economic-survey-lithuania.htm).

Although Lithuania’s growth has been impressive, inequality is high, the risk of poverty is one of the highest of European countries, and life expectancy is comparatively low and strongly dependent on socio-economic background. The low job satisfaction reduces well-being and feeds high emigration. Labour market, social and health policies can all contribute to improve both well-being and growth. Priorities include providing more and better jobs for all, especially for the low-skilled, by making work pay while keeping the labour costs under control. More accessible and adequate income support combined with more ambitious job-search support and training programmes would better-integrate out-of-work individuals into the labour market. Strengthening equity, effectiveness and sustainability of health policies is also instrumental to inclusiveness. This Working Paper relates to the 2016 OECD Economic Survey of Lithuania (www.oecd.org/eco/surveys/economic-survey-lithuania.htm)

The present report on Lithuania is the fourth of a new series on "Investing in Youth" which builds on the expertise of the OECD on youth employment, social support and skills. This series covers both OECD countries and countries in the process of accession to the OECD, as well as some emerging economies. The report provides a detailed diagnosis of the youth labour market and VET system in Lithuania from an international comparative perspective, and offers tailored recommendations to help improve school-to-work transitions. It also provides an opportunity for Lithuania to learn from the innovative measures that other countries have taken to strengthen the skills of youth and their employment outcomes, notably through the implementation of a Youth Guarantee.

 

This paper analyses local employment strategies for shrinking and ageing labour markets through the case study of two local initiatives in Marijampolé, Lithuania. Drawing from desk research, quantitative analysis and primary interviews, the paper determines the effectiveness of Marijampolé’s Third Age University and the Petras Kriaučiūnas Public Library in re-training older workers to improve professionalism, entrepreneurialism and skills development, particularly in information and communication technologies. The analysis also draws synergies between national, regional and local strategies to reskill the Lithuanian labour market to outline appropriate strategy and implementation recommendations for policy makers.

This report contains the 2014 “Phase 2: Implementation of the Standards in Practice” Global Forum review of Lithuania.

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 120 jurisdictions which participate in the work of the Global Forum on an equal footing.

The Global Forum is charged with in-depth monitoring and peer review of the implementation of the standards of transparency and exchange of information for tax purposes. These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004, which has been incorporated in the UN Model Tax Convention.

The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard.

All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes.

Les Panorama des pensions a été développé dans le but de servir un besoin grandissant pour les pensions indicateurs. Il comprend des statistiques fiables et comparables sur les pensions publiques et obligatoires et volontaires. Cette base de données couvre 34 pays de l'OCDE et vise à couvrir tous les pays du G20 avec pour but d'analyser les mesures de retraite en vigueur ou prévues par la loi dans les pays de l'OCDE. Elle fournit une sélection complète d'indicateurs des politiques de retraite pour tous les pays de l'OCDE et du G20.

The Pensions at a Glance database includes reliable and internationally comparable statistics on public and mandatory and voluntary pensions. It covers 34 OECD countries and aims to cover all G20 countries. Pensions at a Glance reviews and analyses the pension measures enacted or legislated in OECD countries. It provides an in-depth review of the first layer of protection of the elderly, first-tier pensions across countries and provideds a comprehensive selection of pension policy indicators for all OECD and G20 countries.

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by 120 jurisdictions, which participate in the Global Forum on an equal footing.

The Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transparency and exchange of information for tax purposes. These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004. The standards have also been incorporated into the UN Model Tax Convention.

The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. Fishing expeditions are not authorised but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard.

All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined  – Phase 1 and Phase 2 – reviews. The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes.

All review reports are published once approved by the Global Forum and they thus represent agreed Global Forum reports.

The European Conference of Ministers of Transport (ECMT) has adopted a new approach to strengthening its work on road safety. It is now working to contribute more effectively to the debate on the improvement of road safety policies by conducting peer reviews of the measures and policies enacted by member countries. 

Lithuania is the first country to undertake this type of review in the safety field. This review, carried out by experts from Austria, the Netherlands, Sweden and the ECMT Secretariat, is an effective way for Lithuania to openly examine its policies and practices through detailed expert comment, discussion and insight on its activities. 

The peer review process is used extensively within the OECD and its affiliated organisations, always originating at the request of the country being reviewed. Apart from providing an open appraisal of national policies, the review process should help relevant Ministries obtain needed resources and implement effective policies and practice.