Every sixth person in Estonia lived in relative poverty last year

Posted on 19 December 2012, 10:00

According to Statistics Estonia, in 2011, 17.5% of the Estonian population lived in relative poverty. The overall percentage of people living in relative poverty stayed on the same level compared to the previous year, but the income of the population increased.

In 2011, the income of the population increased and the yearly average unemployment decreased. Social transfers (state benefits and pensions) helped to prevent the fall in poverty, as they were not included in income, the at-risk-of-poverty rate was even 40.1% in 2011 (in 2010 – 41.1%).

In 2011, a person was considered to be at-risk-of-poverty if his/her monthly equalised disposable income was below 299 euros (in 2010 – 280 euros). Compared to 2010, people’s incomes increased. This caused the rise of at-risk-of-poverty threshold by nineteen euros. In 2011, the difference in income between the poorest and richest fifth of the population was 5.4-fold.

Compared to the previous year, it can be noticed that the percentage of younger people who are living in relative poverty is decreasing, and that of persons aged 65 and older – increasing. In 2011, 21% of persons aged 18–24 and 17% of persons aged 65 and more lived in relative poverty (in 2010 – 22% and 13%, respectively). The important reason is the decreasing unemployment rate of younger age groups.

By type of household, the at-risk-of-poverty rate has increased the most in households of a single person aged 65 and over (by 9.8 percentage points) and decreased in households of a couple with three or more children (by 4.2 percentage points).

By regions, for the residents in Northeastern Estonia the at-risk-of-poverty 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. Of persons with basic or lower education every third was in the poorest and only every fifteenth 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 (8.7%) was more than three times smaller than of persons with basic or lower education (26.6%). Higher level of education is an important presumption for the prevention of poverty.

More detailed information can be found  (only in Estonian).

The estimations are based on the Social Survey, which has been conducted by Statistics Estonia since 2004. In 2012, more than 5,400 households participated in the survey. The survey collects data about yearly income, which is the reason why the survey of 2012 asks for data about incomes in 2011. The yearly income is necessary for calculating the indicators of poverty and inequality. Social surveys are conducted by statistical organisations in all European Union countries on the basis of harmonised methodology by the name of EU-SILC. Eurostat publishes the data according to the year of conducting the survey, thus Eurostat’s news release on relative poverty for 2011 published on 03.12.2012 included the indicators of relative poverty in Estonia calculated on the basis of incomes of the year 2010 ().

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