Policy
Lithuania’s Fertility Challenge: Trends and Policy Options
Occasional Paper Series, No. 63/2026, Bank of Lithuania
Lithuania has one of the lowest fertility rates among advanced economies. This report combines population-wide administrative microdata, international evidence, and descriptive regressions for European countries to identify the main features of Lithuania’s recent fertility decline and the policy areas most relevant to addressing it. The microdata show that younger cohorts have fewer children at the same age and are more likely to remain childless, suggesting lower completed fertility unless substantial catch-up occurs at older ages. The decline is increasingly concentrated at the transition into parenthood, while family size among mothers remains relatively stable. The combined evidence suggests a targeted and coordinated policy mix rather than a single intervention: financial and parental leave support concentrated around the first birth; reliable childcare availability coordinated with paid parental leave and flexible return-to-work arrangements; measures to improve housing affordability; and timely fertility information and equitable access to infertility care.
Can be downloaded here.
Indexation, Reserves, and Crisis Resilience: An Assessment of Lithuania’s Social Insurance Fund
Occasional Paper Series, No. 60/2026, Bank of Lithuania
This paper assesses reserves of Lithuania’s social insurance fund (Sodra) under demographic ageing and macroeconomic stress, projecting the budget through 2050 under two pension indexation rules: the current law and a seven-year average rule that allows for reserves to be used for pension expenses. The choice between the rules produces a sharp trade-off between reserve accumulation and pension adequacy. Within the seven-year average baseline, investment and fiscal instruments can ease the demographic pressure but cannot resolve it. Under a Global Financial Crisis-style shock, the indexation rule determines the distribution of crisis costs: reserves absorb the shock under one rule, pensioners under the other.
Can be downloaded here.
An Ex-Ante Assessment of the Proposal to Reform the Second Pillar of the Lithuanian Pension System
Occasional Paper Series, No. 57/2025, Bank of Lithuania
This document offers an ex-ante assessment of the proposal to allow the withdrawal of funds from the second pillar of the Lithuanian pension system. First, we use a quantitative macroeconomic model to quantify, under alternative scenarios, the potential impact that the withdrawal of Pillar II funds might have on the economy in the medium term. Second, we offer a long-term view of the current pension replacement rates and the consequences that the withdrawal of funds might have for those individuals who decide to opt-out of Pillar II.
Can be downloaded here.