LIETUVOS DARBO RINKA: PROBLEMOS IR GALIMI SPRENDIMO BŪDAI
LITHUANIAN LABOUR MARKET: PROBLEMS AND POSSIBLE SOLUTIONS

Summary/Abstract: Since 2002 the expansion of Lithuanian economics has induced relevant changes in the labour market. These changes reflect the growth of labour force demand. However, an increasing labour force demand is not satisfied. Therefore the main purpose of this article is to identify problems of Lithuanian labour market and provide possible solutions. The research methods applied in this article include analysis, generalization and evaluation of statistical data from Department of Statistics to the Government of the Republic of Lithuania and Eurostat, internet and secondary resources, employers’ survey results. Increase in job vacancies and average weekly work hours reflect the growth of labour force demand as well as decline in labour force supply. Further statistics related to population, migration trends and labour force activity rate show clear decline in labour force supply. The shortage of labour force supply caused pressure in Lithuanian labour market and stimulated rapid increase in wages. As increase in labour productivity is not as rapid as increase in wages the risk of inflation occurs in the short run and economic recession occurs in the long run. The analysis of macroeconomic and social indicators shows that increasing labour force demand and declining labour force supply form the shortage of labour force supply. The comparison of Lithuanian labour market and EU labour market shows that while the unemployment rate in Lithuania is much lower than EU 25 or EU 15 average, the employment rate and labour productivity are not as high as EU 25 or EU 15 average. The results of employers’ survey prove the shortage of labour force supply in Lithuanian labour market. The main reason of labour force shortage identified by respondents is emigration. Other reasons named by employers are lack of work experience, professional skills, etc. The most desirable occupations are of vocational background. In the area of vocational background employers seek employees having occupations of metal processers, construction workers, motor vehicle drivers. The shortage of labour force supply causes problems related to fluent performance of business activities. The analysis of survey results reveals that Lithuanian enterprises are reluctant to invest in increase of labour productivity. Instead employers, for solving problems of the labour force shortage, use the increase of wages and employment of foreign workers, i. e. means that give effect in the short run. Considering the identified problems of Lithuanian labour market further solutions are suggested. The increase in labour force supply is possible through the increase in share of population participating in the labour market or the increase in labour productivity. As labour productivity in Lithuania is one of the lowest in EU countries the increase in it is the most effective solution aimed at elimination of the shortage of labour force supply and to ensure permanent development of economics.

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