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A fifth of Estonians live in poverty, report shows

Dec 17, 2013
From wire reports, TALLINN

According to Statistics Estonia, in 2012, 18.7% of the Estonian population lived in relative poverty and 7.3% in absolute poverty.

The overall percentage of people living in relative poverty increased 1.2 percentage points compared to the previous year, but the percentage of people living in absolute poverty decreased 0.8 percentage points.

In 2012, the income of the population increased, at the same time income inequality increased as well. Social transfers (state benefits and pensions) helped to prevent falling into poverty, as had they been included in income, the at-risk-of-poverty rate would have been 39.6% and the absolute poverty rate – 31.3%.

In 2012, a person was considered to be at-risk-of-poverty if his/her monthly equalised disposable income was below 329 euros (299 euros in 2011) and in absolute poverty if his/her monthly equalised disposable income was below 196 euros (186 euros in 2011). In 2012, the difference in income between the poorest and richest fifth of the population was 5.5-fold.

Compared to 2011, it is noticeable that the at-risk-of-poverty rate has primarily increased in the case of elderly people. In 2012, 24% of persons aged 65 and over lived in relative poverty (17% in 2011). 2% of elderly people lived in absolute poverty. At the same time, the poverty of elderly people is not as serious as the poverty of children – in 2012, 18% of children aged under 18 lived in relative poverty and 9,5% in absolute poverty.

The level of education significantly affects the risk of falling into poverty. Among persons with basic or lower education, every third was in the poorest and only every fourteenth in the richest income quintile.

At the same time, one-third of people with higher education belonged to the richest fifth. Therefore, the at-risk-of-poverty and absolute poverty rates of persons with higher education (10.9% and 3.3%, respectively) were more than two and a half times smaller than those of persons with basic or lower education (28.1% and 9.3%, respectively). A higher level of education is an important prerequisite for the prevention of poverty.

The estimations are based on the Social Survey, which has been conducted by Statistics Estonia since 2004. In 2013, more than 5,700 households participated in the survey. The survey collects data about the yearly income, which is the reason why the survey of 2013 asks about the income of 2012.

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