It’s Not Just Wages Driving Lithuanians Out of the Country

“Statistics from recent years reveal that an increasing number of Lithuanians are once again looking abroad and considering leaving Lithuania. Is there cause for concern that a new wave of emigration might be beginning? What is prompting people to leave Lithuania? Can the country offer sufficiently attractive living and working conditions, and what needs to change so that Lithuanians choose to build their futures here? Žygimantas Mauricas, Chief Economist at Luminor, provides some answers.

 

– For the first time in the last six years, the number of people emigrating has exceeded the number of people arriving in the country. Should this be viewed as a short-term phenomenon driven by specific circumstances, or are we actually seeing a shift in trends?

 

– Well, perhaps the most disheartening aspect is that the number of people immigrating over the past five years has not been as high as might have been expected. It seems Lithuania did not do everything it could to entice more of its citizens who had previously emigrated to return home. While the economy was certainly thriving, various factors got in the way—be it the pandemic, the war in Ukraine, economic shocks, interest rate fluctuations, or even bureaucratic hurdles, such as the difficulties children face when trying to integrate into the local system.” And now we are seeing a rather unpleasant trend: the number of people leaving Lithuania is rising slightly again, while the number of people arriving is falling. It is quite possible that, for the current period, the net balance could even turn negative.

 

– So, why are people leaving? One factor is likely wages—as you mentioned, in Scandinavia, one might earn twice as much, or even more, for the same job. To what extent does the geopolitical situation play a role? In your opinion, what are the primary reasons driving this flow of people?

 

– I would identify three main reasons. Two of these—the factors pushing people to leave—are purely economic. The first is housing—specifically, the sharp rise in housing costs. Housing prices are increasing much faster than people’s incomes. Those considering a move—for instance, to a major city like Vilnius—soon realize that the ratio between wages and housing costs is far from ideal. In fact, if we compare how many years of work are required to purchase an average home, Vilnius is the most expensive among the capitals of the Scandinavian countries—to say nothing of other nations' capitals.

 

The second factor is the general rise in price levels; previously, the situation was: "Well, sure, wages are lower here, but the cost of living is lower, too." Wages here are lower now, yet the cost of living is no longer cheaper. In some Western European countries, it is actually less expensive.

 

A third factor is competition from immigrants, who are concentrated in specific sectors—for instance, construction. The use of temporary agency workers is also on the rise in the industrial sector. Consequently, local workers—even while employed within Lithuania—may find that they cannot even use the official state language in their daily work. So, what is the real difference between working alongside these newcomers in Lithuania versus going to, say, a Scandinavian country to work with the very same people—only for a higher wage? I believe this also has an impact.

 

Then there is the geopolitical backdrop, though, in terms of politics, this hasn't been a particularly prominent factor since 2022.

 

– You mentioned that there were steps Lithuania failed to take or opportunities it didn't seize, despite a growing economy and rising wages. Housing affordability is one such issue. What could Lithuania have done—in this and other respects—to ensure the situation today would be different?

 

– Well, perhaps more attention should have been paid to proactively attracting people; at times—especially about five years ago—that was the impression one got. I pointed out that there was a major opportunity during the pandemic, but everyone was preoccupied with various restrictions. I said, "Fine, that’s a separate issue—perhaps some measures were necessary—but you should seize this moment, given that people are working from home."

 

If people start working from home while in Lithuania, then Lithuania effectively becomes their home. We should have pulled out all the stops—tax incentives, whatever it took—to get them to come and work here. After all, what difference does it make where you sit? Besides, rent here is cheaper than in places like London. It would have taken a significant push, but I believe we could have attracted many more people.

 

More generally, of course, we still face certain challenges, for instance, when a family with children arrives, only to find there’s no space for the kids in a kindergarten or school. They’re told, "Wait six months; we’ll take you next year." Naturally, that dampens their enthusiasm. We need to ensure that our system is as welcoming as possible for those who wish to return.”