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Reforming Social Security in a Transition Economy: The Case of Lithuania

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  • Svend Jensen
  • Jukka Lassila

Abstract

This paper points out a number of problems associated with the existing pension system in Lithuania. Reforms are proposed, including (i) a substantial increase in the basic pension benefit rate, financed on a pay-as-you-go basis, provided universally, and regulated according to wage/price indexation; (ii) a significant cut in the tax contribution rate to the public pension system matched by a rise in the VAT; (iii) a rise in the retirement age to 65 for both men and women; and (iv) a gradual conversion to a private, funded, mandatory pension system to replace the earnings-related part of the current pension system.

Suggested Citation

  • Svend Jensen & Jukka Lassila, 2002. "Reforming Social Security in a Transition Economy: The Case of Lithuania," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(1), pages 17-36.
    • Handle: RePEc:taf:jpolrf:v:5:y:2002:i:1:p:17-36
    DOI: 10.1080/13841280212382
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    References listed on IDEAS

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