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284,300 Estonian residents at risk of poverty in 2018

Posted on 18. December 2019 10:00

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%.

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.

Read more about the change in deprivation methodology.