Income Inequality and Redistribution in Lithuania: The Role of Policy, Labor Market, Income, and Demographics

We model the household disposable income distribution in Lithuania and explore drivers of increase inequality between 2007 2015. quantify contributions four factors to changes distribution: (i) demographics; (ii) labor market structure; (iii) returns prices; (iv) tax–benefit system. Results show that effects were substantial reflected heterogeneous developments over two subperiods: tax benefit system cushioned a rapid rise because global financial crisis during 2007–2011, but failed do so subsequent years economic expansion, when rising capital markets significantly increased inequality. also find declining marriage rates contributed Lithuania.