| Abstract [eng] |
What is the relationship between unemployment and the informal economy? Are those who engage in the informal economy exclusively those excluded from the formal labor market? And do they engage in informal work out of necessity due to the absence of alternative means of livelihood? The aim of this book is to answer these questions. To do so, this book evaluates the relationship between the informal labor market and unemployment rate in the Republic of Lithuania, situated in the Northern European region. As noted by Černiauskas and Dobravolskas (2011), the Republic of Lithuania declared its independence from the Soviet Union in 1990, and immediately took on the work of simultaneously building a nation state and implementing the market reforms focused on price liberalization and small-scale privatization. Like most other post-Soviet transition economies, the informal economy has remained an extensive and persistent feature of the Lithuanian economy. According to Medina and Schneider’s (2018) estimations, the size of the informal economy in Lithuania in 2017 was 23.8% of GDP, which signifcantly exceeded the European Union (EU) average of 16.6% of GDP. Thus, Lithuania still faces economic problems, such as large informal economies, akin to transition, and emerging economies. Based on ILO data (ILO, 2021), the average size of the informal economy in Lithuania in 1991–2015 period amounted to 25.2% of GDP. |
