Introduction Unemployment is a situation where individuals who are actively looking for jobs are not able to find work (Boyes and Melvin 47). Unemployment is often measured in terms of the percentage of the labor force that is not employed. This measure is used to evaluate the economic health of a country. Unemployment is undesirable because of its negative effects on individuals, cities, countries, and economic blocs. A high unemployment rate is associated with poor standards of living and low economic growth. In Lithuania, the unemployment rate rose from 5.3% in 2008 to 13.6% at the end of 2009 (World Bank). However, the rate reduced to 11.3% in 2013. The reduction is attributed to the efforts made by the government to resuscitate the economy through export promotion and improving efficiency in the public sector. This paper will focus on the effects of unemployment on individuals in Lithuania. Effects of Unemployment Economic Effects One of the major effects of unemployment is lost income. Limited access to income greatly reduces the purchasing power of the unemployed (Gupta and Mandal 63). As a result, they cannot afford basic needs such as food, clothing, and shelter. This leads to a significant reduction in the standards of living and quality of life. During the 2007/ 2008 global financial crisis, most of the people who lost their jobs had to depend on the financial support that was provided by the government to make ends meet. However, the government provided limited support since it focused on implementing austerity measures to reduce public debts (Giulietti, Guzi and Zimmermann 24-38). As a result, most of the unemployed had difficulties in accessing basic needs. Lose of income during unemployment also increases the risk of defaulting on loans (Boyes and Melvin 78). Since the unemployed have no regular income, their ability to service their loans is very limited. For instance, thousands of low-income earners in the country lost their homes during the recent global financial crisis because they could not repay their mortgages. Undoubtedly, unemployment is one of the major causes of poverty in Lithuania. Oftentimes, the unemployed are forced to sell their properties and investments in order to meet their financial requirements. Once the proceeds are used for personal needs, the unemployed are left in a poorer state than they were before losing their jobs (Rossana 82). Poverty is perpetuated by the fact that the unemployed can hardly access funds from lending institutions such as banks to start their businesses. The economic effect of unemployment on individuals is influenced by the general state of the macroeconomic environment and the availability of social safety nets. In Lithuania, the low inflation rate of 0.4% reduces the economic burden of unemployment by making basic goods and services to be affordable to the unemployed (World Bank). In 2013, the country’s GDP grew by only 3.4%. This low economic growth rate limits job creation, which in turn reduces the ability of the unemployed to find work or to access support from relatives (Rossana 112). However, the unemployed who have adequate savings and income generating investments can mai