Labor code reform and flexible work arrangements in Lithuania: gender differences in demand and outcomes

The aim of the paper is to analyze the impact of the Labor code reform in Lithuania on the flexible work arrangements with regards to gender differences in its outcomes. We observe positive labor market trends in Lithuania for the period of 2014-2019 and since the introduction of the Labor code reform, i.e.: increase in employment rate for both men, women and for people with care-related responsibilities, increased share of permanent contracts, increased flexibility of the working schedules and more favorable evaluation of the working time as optimal by both sexes. However, the argument is that these positive changes would have happened in the Lithuanian labor market in the first year after the reform even if there was no change in employment laws. Our strategy for identifying the reform effects is based on an assumption that higher effect of the new legislation, if any, can be expected on women with care-related responsibilities due to their higher demand for flexibility, compared to both women with no such responsibilities and men with or without care-related responsibilities. The identified reform effects after controlling for other effects and individual characteristics are significant in three areas: reduction in the employment level, reduction in the prevalence of contracted work and a high positive effect in the prevalence of permanent contracts. No reform effect was identified for changes in the prevalence of full-time versus part-time work, standard versus non-standard working hours and evaluation of working time as being more or less optimal by workers. Hence, it can be stated that the Labor code reform has not, at least within its first year of functioning, achieved more flexibility in the labor market for those who have higher demands for it and no associated increase in the satisfaction with the time balance between work and care-related responsibilities.

Unpublished version

Jekaterina Navicke
Arūnas Juška