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

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    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.
    Original languageEnglish
    JournalJournal of Economic Policy Reform
    Pages (from-to)17-36
    Number of pages20
    Publication statusPublished - 2002


    • Pension reform
    • Transition economies
    • Dynamic cge models

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