Every 4th Estonian at risk of poverty in 2018

According to Statistics Estonia, 21.7% of the Estonian population lived at risk of poverty and 2.4% lived in absolute poverty in 2018. Compared to 2017, the share of people at risk of poverty decreased by 0.2 percentage points and the share of those living in absolute poverty by 0.3 percentage points.

In 2018, a person was considered to be at risk of poverty, if his or her equivalised monthly disposable income was less than 569 euros, and in absolute poverty, if it was less than 215 euros.

The at-risk-of-poverty rate decreased for single person households, i.e. people living alone, as well as among single parents. The gap between the richest and poorest quintile of the population did not change year over year. By age groups, the gap is smallest among older persons (aged 65 and older), although in the last decade, it has widened slightly each year.

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, increased from 11.0% in 2017 to 12.1% in 2018.

Social transfers, i.e. state benefits and pensions, helped to prevent falling into poverty. Without including these in income, 39.1% of the population would have been at risk of poverty and 22.7% in absolute poverty.

Compared to 2017, the at-risk-of-poverty rate remained at the same level (20.9%) among young people aged 16–24, but increased among children. Among children under 18, the at-risk-of-poverty rate was 17.1% in 2018, i.e. 1.9 percentage points more than in 2017. At the same time, the absolute poverty rate of children fell from 2.5% in 2017 to 1.6% in 2018. There has been a decrease in the share of older people living at risk of poverty – the rate among persons aged 65 and older fell from 46.4% in 2017 to 43.1% in 2018.

Of the Estonian population, 7.6% lived in deprivation in 2019. The deprivation rate was highest among older persons (aged 65 and older) at 10.4% and lowest among 18–24-year-olds at 5.3%.

Estonian poverty 2018

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, organised by Statistics Estonia since 2004. 6,265 households participated in the survey in 2019. The survey collects data about yearly income, which is why the 2019 survey asked about the income in 2018. The yearly income is necessary for calculating the indicators of poverty and inequality. The social survey called EU-SILC is conducted by statistical organisations in all European Union countries on the basis of a harmonised methodology. For the statistical activity “Estonian Social Survey”, the main representative of public interest is the Ministry of Social Affairs.

 

 

 

Deprivation rate is the share of persons who cannot afford at least 5 of the 13 items:

1) to pay rent or utility bills,

2) to keep home adequately warm,

3) to face unexpected expenses,

4) to eat meat, fish or a protein equivalent every second day,

5) a one-week holiday away from home,

6) a car,

7) to replace furniture when worn out or damaged,

8) to replace worn-out clothes with new ones,

9) to have at least two pairs of outdoor shoes in good condition that are necessary in our climate,

10) to spend a small amount of money each week on oneself,

11) to participate regularly in a leisure activity that costs money,

12) to get together with friends or family for a drink or meal at least once a month or

13) to have internet connection at home for personal use when needed.

In the Estonian Social Survey, items 8–13 are asked from persons aged 16 and over. Therefore, when calculating deprivation for these items for children, at least half of the household members (16 and over) should be deprived with regard to these items.

Source: Statistics Estonia
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65 pct of the Estonian gross value added was created in Harju county

According to Statistics Estonia, in 2018, 65% of the Estonian gross value added was created in Harju county, but the rest of the country is slowly catching up with Harju county.

In 2018, the gross domestic product (GDP) of Estonia was 26 billion euros at current prices. The contribution of Harju county amounted to 17 billion euros, 14 billion euros of which came from Tallinn. Harju county was followed by Tartu county and Ida-Viru county, the shares of which in Estonia’s GDP stood at 10% and 6%, respectively. Hiiu and Põlva counties had the smallest shares in 2018 – both contributed less than 1% to the Estonian GDP.

In 2018, 69% of the gross value added of Estonia was created in the service sector. The share of services was the biggest in Harju county (77%) and Tartu county (69%), mainly due to the influence of the cities of Tallinn and Tartu. Overall, the sector’s share in value added either remained on its previous level or decreased slightly. An exception to this was Järva county. The fastest decreases in the share of the sector took place in Valga, Viljandi and Võru counties.

Industry and construction accounted for 28% of the gross value added of Estonia in 2018. The highest share in value added is in Ida-Viru county (58%). The smallest shares of the sector are in Harju (22%), Tartu (27%) and Põlva (28%) counties. For the country as a whole, the share of the sector in value added remained at the level of 2017. However, between counties the picture was more complex. While in Põlva and Saare counties the share of the sector experienced a notable rise, the trend for Pärnu, Valga and Võru counties was opposite.

The agricultural sector accounted for 3% of the gross value added of Estonia in 2018. This sector had the largest share in Viljandi (22%) and Jõgeva counties (19%). Similar to 2017, the sector increased its share in value added again in 2018. The biggest impacts were seen in Valga, Viljandi and Võru counties.

In 2018, GDP per capita was 19,695 euros, which was 1,647 euros more than a year earlier. GDP per capita was the biggest in Harju county – 144% of the Estonian average. Harju County was followed by Tartu and Viljandi counties, where GDP per capita amounted to  91% and 67% of the Estonian average, respectively. The lowest level of GDP per capita was recorded in Põlva county – 42% of the Estonian average. In recent years, some counties have gotten notably closer to the Estonian average GDP per capita. This is most notable in Hiiu, Jõgeva, Rapla and Tartu counties. At the same time, Harju county has gotten closer to the Estonian average as well.

Agricultural sector – agriculture, forestry and fishing.

Industry and construction – mining and quarrying; manufacturing; electricity, gas, steam and air conditioning supply; water supply; sewerage, waste management and remediation activities; construction.

Service sector – wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities; information and communication; financial and insurance activities; real estate activities; professional, scientific and technical activities; administrative and support service activities; public administration and defence; compulsory social security; education; human health and social work activities; arts, entertainment and recreation; other service activities.

Source: Statistics Estonia

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Working international students and graduates paid over 10 mEUR in taxes

Statistics Estonia prepared an analysis for Archimedes Foundation on the participation of international students in the Estonian labour market and its impact on the economy. It appeared that in the previous academic year, foreign students paid eight million euros in income and social tax in Estonia. International students who graduated the year prior contributed additionally over two million euros. The share of international students who work besides studying has increased significantly in the last three years. A half of them continue working in Estonia even after receiving a diploma.

Working international students and graduates

There are more than 5,000 international degree students in Estonia. One in ten students in Estonian higher education institutions comes from another country. Each year, study opportunities in Estonian higher education institutions are promoted abroad. Archimedes Foundation sought to find out whether and how international students participate in the Estonian labour market.

“Foreign students who get accustomed to life in Estonia during their studies could contribute to the local labour market and economy also after graduation. Considering that the money foreign students earn is also spent in Estonia, it can be estimated that, in the previous academic year, international students contributed around 20 million euros to the economy,” explained Eero Loonurm, head of the international marketing agency at Archimedes Foundation. He added that one of the indicators in the strategy for the international promotion of Estonian higher education is employment in Estonia after graduation. The objective is that 30% of international students in Master’s or Doctoral studies would continue working in Estonia.

Kadri Rootalu, data researcher at Statistics Estonia, explained that by combining databases Statistics Estonia’s experimental statistics team can study data on student employment in more detail, for example, by level and field of education. “It came as a surprise that international graduates make such a big contribution in information and communication as well as manufacturing enterprises,” said Rootalu.

Facts

  1. Approximately a half of international students in Estonia work besides studying, compared to over 80% of local students.
  2. The share of international students who after graduation stay in Estonia for work has slightly increased in the last two years: in 2017, it was 45%, and in 2018, it was 51%.
  3. The share of working international students is smallest in integrated study programmes. Only a few international students in these programmes work besides studying, as opposed to around 80% of local students. Compared to other levels of study, international students in Bachelor’s studies work less.
  4. The share of international students with a Master’s or Doctoral degree who worked immediately after graduation was 56% in academic year 2016/2017 and 58% in 2017/2018.
  5. The most likely to continue working in Estonia after finishing studies are international students of Tallinn University and Tallinn University of Technology.
  6. The most likely to work besides studying are international students in information and communication technologies; engineering, manufacturing and construction; and business, administration and law (two thirds of international students in these fields worked in academic year 2018/2019). Graduates in the same fields also stay working in Estonia more frequently compared to others. A contributing factor could be that there are many enterprises offering an international work setting for graduates of these fields.
  7. For years, international students have mainly worked in administrative and support service, accommodation and food service and information and communication enterprises.
  8. Compared to local students, international students are more likely to work in enterprises in foreign ownership.
  9. In academic year 2018/2019, international students in Estonia paid 2.4 million euros in income tax and 5.6 million euros in social tax.
  10.  International students in information and communication enterprises contributed the most (total income tax paid in academic year 2018/2019 was 0.73 million euros). The contribution of foreign graduates was also largest in this economic activity.
  11. In 2018/2019, international students who graduated in 2017/2018 paid 0.9 million euros in income tax and 1.9 million euros in social tax in Estonia.

The analysis covered international students and graduates in academic years 2016/2017–2018/2019 who had Estonian ID codes and were entered into the Estonian Education Information System. Employment and income of the students were observed on the basis of records in the employment register and tax form TSD of the Tax and Customs Board.s

Statistics Estonia’s experimental statistics team performs contract work that involves linking or combining the data of Statistics Estonia with register or survey data. The team also engages in data mining and analysis, builds statistical models and assesses policy impacts.

The study was supported by the Dora Plus Programme, which is financed from the European Regional Development Fund as part of European structural funds.

Source: Statistics Estonia

10,000 job vacancies, one third of which in public sector

According to Statistics Estonia, in the 3rd quarter of 2019, there were 11,892 job vacancies in the enterprises, institutions and organisations of Estonia. The number of job vacancies has remained above 10,000 since the 1st quarter of 2017.

The number of job vacancies increased by 4% compared to the 3rd quarter of 2018 and by 6% compared to the 2nd quarter of 2019.

The total number of vacant and occupied posts was 609,126, which is nearly 0.3% less than in the previous quarter. The economic activities of manufacturing (18%), wholesale and retail trade (15%) and education (10%) continue to hold the largest shares in the total number of posts. Manufacturing, wholesale and retail trade and education are also the biggest employers in Estonia – in the 3rd quarter of 2019, there were 2,050 job vacancies in wholesale and retail trade, 1,473 job vacancies in education and 1,407 job vacancies in manufacturing. These activities were followed by public administration and defence with 1,125 vacant posts.

The rate of job vacancies, i.e. the share of job vacancies in the total number of posts was 2% in the 3rd quarter of 2019, which is 0.1 percentage points higher than in the 3rd quarter of 2018. The rate of job vacancies was highest in information and communication (3.1%) and in public administration and defence (2.9%), and lowest in mining and quarrying and real estate activities (both 0.2%).

Vacant posts in the public sector accounted for 31% of all job vacancies. The rate of job vacancies was highest in municipal institutions and enterprises (2.7%). In state institutions and enterprises, the rate was 2.2%, and in enterprises owned by Estonian and foreign private entities, 1.6% and 2.3%, respectively.

Most of the vacant posts were in Harju county (75%), incl. Tallinn (63%), followed by Tartu county (8%) and Pärnu county (3%). The rate of job vacancies was highest in Harju (2.6%) and Võru (1.8%) counties and lowest in Hiiu (0.2%) and Lääne-Viru (0.5%) counties.

The movement of labour is characterised by labour turnover (the total number of engaged and left employees), which amounted to nearly 118,000 in the 3rd quarter of 2019. Labour turnover increased by 18% on the same period of the previous year and by 2% on the previous quarter. Both the number of employees hired and the number of employees who left their job remained highest in wholesale and retail trade, manufacturing and construction. 9% of all the employees who left their job left on the employer’s initiative.

Statistics Estonia has conducted the vacant and occupied posts and labour turnover survey since 2005. In 2019, the sample includes 8,300 enterprises, institutions and organisations, and also non-profit organisations and foundations with less than 50 employees have been included in the population.

Source: Statistics Estonia

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365.6 million euros in research and development

According to Statistics Estonia, in 2018, the expenditure on research and development (R&D) in Estonia amounted to 365.6 million euros, which is a fifth more than in 2017.

The increase in R&D expenditure was somewhat expected, as the new financing period of the Structural Funds began in 2017 and its impact was felt also last year. Expenditure grew in all subsectors, but most of all in the higher education sector, where it grew 35% compared to the previous year. Also the business sector contributed more to R&D activities. The total R&D expenditure of enterprises was 155 million euros, which is 8% more than last year.

As in 2017, expenditure continued to grow mainly on account of investments. Total investments increased by 46% and the increase was notable in the higher education sector and public sector. Investments decreased in the business sector and private non-profit sector. Labour costs, which account for more than half of R&D expenditure, increased by 13% compared to the previous year. The only exception was the public sector, where labour costs decreased by 8%.

156 million euros, i.e. 43% of the R&D expenditure came from the state budget in 2018. This includes also European Union subsidies, which are included in the state budget and are therefore counted as government allocations. The majority (70%) of the state budget allocations went into the higher education sector. State budget allocations accounted for 6% of the R&D expenditure of the business sector.

Estonia’s R&D intensity index is the ratio of expenditure on R&D to GDP. In 2018, the R&D intensity index in Estonia was 1.4. According to preliminary data, Estonia is 13th among the European Union countries based on the index value. Compared to 2017, Estonia has moved up two places. The current growth rate implies that the objective to increase the share of R&D expenditure in the GDP to 3% by 2020 will probably remain unattainable.

Source: Statistics Estonia
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