| Abstract [eng] |
The master's final degree project examines the impact of social benefits on the Lithuanian labor market. In recent decades, Western countries have seen a shrinking labor force and a growing need for social assistance, making some social security systems unsustainable. In these circumstances, it is important to ensure that residents participate more intensively in the labor market and do not depend on social support. Thus, the aim of the work is to study the impact of social benefits on the labor market, the object of the work is the impact of social benefits. To achieve this goal, methods of scientific literature analysis, comparative analysis of statistical data, correlation analysis, Granger causality test and regression analysis are used. The detailed tasks aim to describe the problem of the impact of social benefits on the labor market, the theoretical social impact on the labor market, and, after preparing the methodology, to carry out the aforementioned evaluation study of the empirical impact. The obtained results show that the indicators of EU countries are high in unemployment, which in different countries during that period can be divided several times, this phenomenon arises from the inflexible labor market and different social policies. Research conducted in the USA and Western European countries reveals that the impact of social benefits on a person's employment may depend on their age, gender, education and place of residence. The mentioned characteristics affect person‘s behavior in the labor market. Women, residents of regions and persons with low education have more difficulties integrating into the labor market than other population groups, therefore in theory social benefits affect their employment more. Theoretically, the impact of benefits on labor market indicators can be assessed from several different perspectives. When unemployment rises during a recession, the benefits help to maintain the previous level of personal consumption, support the demand for goods and services, maintain the previous production volumes and thereby preserve the remaining jobs. On the other hand, a person receiving social benefits falls into the welfare trap, when receiving so much income, there is a risk of losing state support. In order to solve this problem, the paper proposes a gradual reduction of benefits upon employment, greater involvement in selfemployment programs, and the possibility of applying for unemployment insurance benefits several times a year. Empirical analysis of social and labor market indicators in Lithuania shows that social spending in case of unemployment slightly increases the amount of labor force in Lithuania, it is likely that part of the population returns to the labor market to obtain unemployment status. It was also established that the increase in social costs per resident of Lithuania has a negative effect on the workforce of women aged 54-64 years, the effect is associated with some residents being given the opportunity to receive an early old-age pension. The results revealed that the percentage increase of social expenses in comparison to GDP of Lithuania, decreases employment level. This effect is possible during a recession. When unemployment rises, the country's GDP falls and social expenses increase Therefore lower employment and an increased percentage of social expenses are observed. |
