Transition to a market economy in Lithuania has changed the labor market significantly. The employment rate has decreased in all age groups and resulted in increased productivity of labor. Employment in the private sector and self employment have increased considerably. The share of those employed in agriculture has increased. The worst employment situation is in territories with large rural areas, where employment has decreased and unemployment has risen. Youth unemployment is a major problem. The share of unemployed individuals with professions not in demand is growing. Specialists in new professions or with advanced vocational skills are in great demand. The majority of the unemployed have no professional qualifications. Analysis of the links between vocational education and training and the labor market reveals difficulties such as the following four problems: (1) the courses offered do not correspond to labor demand; (2) employers are very often dissatisfied with the training quality; (3) mobility of the labor force is low; and (4) the state does not pay enough attention to development of continuing vocational training. With fewer allocated funds, active labor market policy measures suffer the most. Also, labor market policies are not an integrated part of the policy of national economic development. (Appendixes include supplementary tables and information by chapter. Contains 28 references.) (YLB)