The Impact of Migration on Lithuanian Economy in an Ageing Society Context

Kasnauskiene, G., Vebraite, L.

Abstract: Because of rapid population ageing Lithuania possesses new economic and social challenges. One of these challenges is the shortage of labour force in the future, which will have a negative impact on the country’s economy. Thus, in this paper the study on impact of one of the significant factors of population ageing - migration - on the economy of Lithuania is conducted. Using a system of variables of net migration, gross domestic product, wage and unemployment rate a structural vector error correction model is developed. The paper also claims that, there is urgent need to implement effective policy means in order to maximize the migration related opportunities and minimize the costs. In addition, while migration can contribute to the growth of Lithuanian economy, it cannot provide by itself a solution to the demographic problems and budgetary implications of an ageing population.

Keywords: population migration, population ageing, structural vector error correction model, economic impact, migration policy

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