OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

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Boosting productivity and inclusiveness in Lithuania

Productivity growth in Lithuania has slowed in the aftermath of the global financial crisis,

holding back income convergence and making it harder to reduce further the relatively high

inequality and poverty. A comprehensive approach is required to address productivity and

inclusiveness challenges, building on their synergies. The government has taken measures

to this end, with the New Social Model at the core, but efforts need to continue. Reforms

should focus on additional improvements in the business environment by easing further

regulations on the employment of non-EU workers and reducing informality. Initiatives to

improve the governance of state-owned enterprises are welcome and need to continue.

Improving access to finance and ensuring effective bankruptcy procedures are key to

boosting firm dynamism, as are measures to encourage business-research sector

collaboration on innovation. Addressing large skills mismatch is also a priority. Increasing

the market-relevance of the education system is important. More and better-quality jobs in

the formal sector, especially for the low-skilled, are key to inclusiveness and well-being,

while more effective support and active labour market programmes would help combating


This Working Paper relates to the 2018 OECD Economic Survey of Lithuania



Keywords: Lithuania, financing productivity, innovation, inclusiveness, benefits, skills mismatch, employment protection legistation, education, inequality, poverty
JEL: O31: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Innovation and Invention: Processes and Incentives; J24: Labor and Demographic Economics / Demand and Supply of Labor / Human Capital; Skills; Occupational Choice; Labor Productivity; J31: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wage Level and Structure; Wage Differentials; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions; I30: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: General; I24: Health, Education, and Welfare / Education and Research Institutions / Education and Inequality
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