One-fifth of nation lives in poverty

  • 2009-07-01
  • By Ashley Brettell

HARD TIMES: Estonia has again been named one of the 10 poorest countries in Europe, with one in five of its citizens live in poverty.

TALLINN - One in five Estonians are considered to be relatively poor and Estonia remains one of the 10 poorest countries in Europe, according to a recently released analysis by Statistics Estonia.
In 2007, 19.5 percent of the Estonian population lived in relative poverty. The difference in income between the poorest quintile and the richest quintile of the population was fivefold, leaving Estonia persistently one of the top 10 poorest countries in Europe.

A person was considered to be at risk of poverty if his or her monthly disposable income was below 4,340 kroons (278 euros). The "at risk of poverty" threshold rose by 860 kroons compared to the year before, the national statistics agency found.
The definition of 'at risk of poverty rate' is the share of persons with a yearly disposable income lower than 60 percent of the average.
The share of persons living in relative poverty did not change significantly compared to the previous year, but the difference in income between the poorest and richest quintile of the population decreased by 0.5 percent.

In 2007, incomes grew for the entire population. Incomes increased most in the smallest and medium income segments. In the first, second and third segments income rose by about a quarter, while for the richest 20 percent of people income increased by 13 percent.
The distribution of income in society remained at about the same level as in previous years. There was no significant movement between the quintiles irrespective of occupation, age and gender.
Income inequality slightly reduced between Estonians and non-Estonians and the urban and rural population. Ethnic Estonian citizens' income increased on average 17 percent over the year, while the income of non-Estonians grew by about 25 percent. Similarly, the income of the urban population grew by 17 percent and that of the rural population by about a 25 percent.

In Northern Estonia, the concentration of richer people among the overall population was the highest at 55 percent. In Northeastern Estonia, meanwhile, the majority of people were categorized as poor 's nearly 60 percent of people belonged to the first or second income quintiles.
Central, Western and Southern Estonians had a comparatively even income distribution. The study found the ratio of rich and poor people tended to be more equal in the cities. In the countryside the poor are a larger majority.

Although relative poverty did not decrease in spite of economic growth, people's subjective appraisals of their health, living conditions and accessibility of health care improved in 2008.
Despite income rises the associated poverty data in Estonia has been consistent for a few years. However, the effects of the current recession are not reflected in the data analyzed by the statistics agency. The next annual report could start to show a significant diminution of incomes and further increases in the numbers falling into relative poverty, the agency said.  

It also expected that there will be changes in the composition of the groups and regions affected by the recession. The next report has been commissioned and will be available in 2010.