295,000 Estonian residents lived at risk of poverty last year

According to Statistics Estonia, 22.6% of the Estonian population lived at risk of poverty in 2017.  The percentage of people at risk of poverty increased 1.6 percentage points compared to the previous year.

The increase in the at-risk-of-poverty rate was due to that the income of persons who had previously earned slightly higher income than the risk-of-poverty threshold, increased at a slower rate than the risk-of-poverty threshold and in 2017 remained below the risk-of-poverty threshold.

In 2017, a person was considered to be at risk of poverty if his/her equivalised monthly disposable income was smaller than 523 euros (469 euros in 2016) and in absolute poverty if his/her equivalised monthly disposable income was smaller than 207 euros (200 euros in 2016).

In 2017, 3.4% of the Estonian population, i.e. 44,000 people, were living in absolute poverty, which is 0.2 percentage points more than in 2016.

The at-risk-of-poverty rate anchored at a fixed moment in time, i.e. the share of people with an equivalised yearly disposable income lower than the at-risk-of-poverty threshold three years ago adjusted for inflation, has decreased from 12.8% to 12.2% over the year.

Social transfers (state benefits and pensions) helped to prevent falling into poverty, as had they not been included in income, 38.5% of the population would have been at risk of poverty (39.2% a year before) and 22.8% in absolute poverty (24.6% a year before).

Compared to 2016, the at-risk-of-poverty rate has decreased both among children and among young people, but has increased among older people. In 2017, 47.5% of persons aged 65 and over were living at risk of poverty (41.2% in 2016). Among children under 18, the at-risk-of-poverty rate was 15.9%, i.e. 0.6 percentage points lower than in the previous year. The absolute poverty rate of children fell as well – from 3.5% in 2016 to 3.2% in 2017.

At-risk-of-poverty rate is the share of persons with equivalised yearly disposable income lower than the at-risk-of poverty threshold. The at-risk-of-poverty threshold is 60% of the median equivalised yearly disposable income of household members. Equivalised disposable income is the total household income, which is divided by the sum of equivalence scales of all household members.

The estimations are based on the Estonian Social Survey, which has been conducted by Statistics Estonia since 2004. Nearly 6,100 households participated in the survey in 2018. The survey collects data about the yearly income, which is why the survey of 2018 asked about the income of 2017. The yearly income is necessary for calculating the indicators of poverty and inequality. The social survey is conducted by statistical organisations in all European Union countries on the basis of a harmonised methodology by the name of EU-SILC. For the statistical activity “Estonian Social Survey”, the main representative of public interest is the Ministry of Social Affairs.

Source: Statistics Estonia

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