Purpose of the article Economic growth is due to successful alignment of education, scientific studies and business. The expected result of smart development is the increase of living standards and quality of life. Each country's sustainable development is determined by public, businesses and public institutions. The paper introduces the analysis which aims to estimate the changes in economic transformation and inequality changes in Bulgaria, Lithuania and the European Union Member States (EU-28) in the year 2005-2015. The country's economic development and poverty reduction is closely related to education, including higher education. The EU-28 is involved into the European Higher Education Area (EHEA), including Lithuania and Bulgaria. Therefore the main aim of the paper is to make a comparative analysis of Bulgaria's and Lithuania's economic development situation in the context of these changes. Higher education, as the most important socioeconomic variable, diminishes economic inequality, increases incomes and reduces economic inequality. If the education level was lower, the economic situation in the country would be worse; the inequity would be more significant. Education determines the individual position of each person in the labour market, his income level, quality of life and its values. The analysis showed that higher education can make a significant influence both to Lithuanian and Bulgarian smart, sustainable and inclusive economic growth and to human capital development. Methodology/methods The methods of research: analysis of scientific literature, statistical classification and comparison, logical comparative analysis and synthesis. For the analysis, data from Bulgarian and Lithuanian Departments of Statistics, World Bank Data, and EUROSTAT databases for the year 2005-2015 are used. Both absolute and relative amounts are compared. The method of base indicators comparison is applied, whereas the first year (e.g., year 2005) of the analyzed period is chosen as base year. The intenseness causes and the changes of the economic inequality level in countries are evaluated. Scientific aim The aim of the study: to analyze the inequality, its reasons and relation with higher education in Bulgaria and Lithuania. Therefore the objectives of the paper are: to make the analysis of the changes of main macroeconomic indicators, the changes of economic inequality (income inequality, labour market inequality, Gini coefficient, risk-of-poverty rate or social exclusion) and the role of higher education in the country's economy. Findings The analysis showed that higher education can make a significant influence both to Lithuanian and Bulgarian smart, sustainable and inclusive economic growth and to human capital development. Conclusions Research shows different effects and the changes of economic indicators in Bulgaria and Lithuania, but in each country the global crisis reduced aggregate demand and demand for labour force, due to this the unemployment level has increased. The growth of unemployment causes the growth of discomfort index and increase of Gini index, which shows unequal distribution of income.
