Poverty level grows

According to Statistics Estonia, in 2010, 17.5 percent of the Estonian population lived in relative poverty, reports LETA. The percentage of people living in relative poverty increased 1.7 percentage points compared to the previous year. In 2009 the at-risk-of-poverty rate was 15.8 percent. In 2010 the income of the population decreased and the yearly average unemployment increased. Social transfers (governmental benefits, pensions) helped to prevent the fall in poverty. As they were not included in income, the at-risk-of-poverty rate was at 41.1 percent in 2010 (in 2009 – 40.8 percent). In 2010, a person was considered to be at-risk-of-poverty if their monthly equalized disposable income was below 280 euros (in 2009 – 286 euros).

Compared to 2009, people’s incomes decreased. This caused the fall of the at-risk-of-poverty threshold by six euros. In 2010 the difference in income between the poorest and richest fifth of the population was 5.3. Similar to previous years, it can be noticed that the percentage of younger people who are living in relative poverty is increasing and that for persons aged 65 and older it is decreasing. In 2010, 22 percent of persons aged 18–24 and 13 percent of persons aged 65 and more lived in relative poverty.

The important reason is the younger age groups’ high unemployment rate and a more stable income in retirement ages compared with other age groups. By type of household, the atrisk- of-poverty rate has increased the most in households of a couple with three or more children (by 7.2 percentage points) and decreased in households of a single person aged 65 and over (by 6.9 percentage points). By regions, for the residents in northeastern Estonia the at-risk-ofpoverty rate was nearly three times higher than for the residents in northern Estonia. Similarly, the poverty risk for people living in rural settlements is significantly higher than for people living in urban settlements. The level of education significantly affects the remaining in risk of poverty. From persons with basic or lower education, every third was in the poorest, and only every sixteenth was 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 rate of persons with higher education (7.5 percent) was more than three times lower than of persons with basic or lower education (25.7 percent). A good education is an important presumption for the prevention of poverty.