A fifth of the residents of Estonia live in relative poverty
25.06.2009, 11:42 In 2007 19.5% of the Estonian population
lived in relative poverty, a similar amount to the previous year, Estonian
Statistics announced.
The difference in income between the poorest and richest fifth of the
population was fivefold, leaving Estonia persistently in the top ten of the
poorest countries in Europe.
In 2007, a person was considered to be at-risk-of-poverty if his/her monthly
equalised disposable income was below 4,340 kroons. The at-risk-of-poverty
threshold rose by 860 kroons compared to 2006. 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 fifth of the population
decreased by 0.5 percentage points. The difference in income between the poorest
and richest fifth of the population was fivefold. In Europe the income
distribution was more unequal than in Estonia in Latvia, Lithuania, Poland,
United Kingdom, Portugal and Greece. The inequality level was similar to
Estonia’s in Italy, Spain and Germany.
In 2007, incomes grew for the entire population. Incomes increased most in
the smallest and medium income quintiles — in the first, second and third — by
about a quarter. In the fifth income quintile that comprises of richer people
income increased by 13%. The distribution of income in society remained at about
the same level as in previous years — there was no significant mobility between
the quintiles irrespective of occupation, age and gender. The richest households
in Estonia are households without children where all members are working (their
at-risk-of-poverty rate is 4%) and the poorest are households with children
where nobody works. In the latter the at-risk-of-poverty rate increased by three
percentage points during the year and rose to 87% in 2007.
Due to the decrease in the differences of incomes, income inequality slightly
lessened between Estonians and non-Estonians and the urban and rural population.
Ethnic Estonian citizens’ income increased on average 17% over the year, while
the income of non-Estonians with other or unspecified citizenship grew by about
a fourth. Similarly, the income of the urban population grew by 17% and that of
the rural population by about a fourth.
In Northern Estonia the concentration of richer people among the overall
population was the highest — 55% of Northern Estonians belonged to the fourth or
fifth income quintiles. In Northeastern Estonia (Ida-Viru county) most people
were poor — nearly 60% of people belonged to the first or second income
quintiles. Central, Western and Southern Estonians had a comparatively even
income distribution. The ratio of rich and poor people tends 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. An increase of a few-percentages
in the share of positive appraisals did not depend on the population’s income
group, place of residence or occupation.
The estimations are based on the social survey, which has been conducted by
Statistics Estonia since 2004. In 2008, over 4,700 households participated in
the survey. The survey collects data about yearly income, which is the reason
why the survey of 2008 asks for data about incomes in 2007. The yearly income is
necessary for calculating the indicators of poverty and inequality. Social
surveys are conducted on the basis of harmonised methodology in all European
Union countries by the name of EU-SILC.
At-risk-of-poverty rate is the share of persons with an equalised yearly
disposable income lower than the at-risk-of-poverty threshold.
At-risk-of-poverty threshold is 60% of the median equalised yearly disposable
income of household members. Equalised disposable income is the total household
income, which is divided by a sum of equivalence scales of all household
members.