The Good Life does not come easily in Lithuania

Abstract

The population of Lithuania has been declining for the last 25 years. This has mainly been caused by high emigration out of the country. In particular, of young adults seeking job opportunities abroad. This has made the demographic composition of the country unfavourable for sustaining a strong social system due to the increased ratio of pensioners. The goal of this thesis was to analyse the migration trend of labour emigration in the context of the theoretical literature and try to replicate it using a system dynamics model based on the migration theories of neo-classical economics and network theory. The model managed to replicate the population development in Lithuania but failed to fully explain the peaks and valleys in the emigration flow, indicating that the model could benefit from drawing from additional migration theory literature. Moreover, since there is no unified statistical method for documentation of migration, data challenges cause an additional level of uncertainty in the reference data. The government of Lithuania has been aware of the emigration issue and approved policy guidelines in order to alleviate the problem. The policies have however been no more than wishful thinking, rather than actual actions, since funding has not been allocated accordingly. Policy measures that could be taken in order to relieve the problem are discussed in this thesis as well as implementation challenges that could act as a barrier for the process. One thing is for sure, if the trend continues, it will have a negative effect on the social system as well as the economy.