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Estonia has made progress over the last decade in terms of improving the quality of life of its citizens. Until the financial crisis of 2008, the economy had seen record-breaking growth. Notwithstanding, Estonia performs well in only a few measures of well-being, relative to most other countries in the Better Life Index.
Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Estonia, the average household net-adjusted disposable income per capita is 14 382 USD a year, less than the OECD average of 23 938 USD a year. But there is a considerable gap between the richest and poorest – the top 20% of the population earn more than five times as much as the bottom 20%.
In terms of employment, some 67% of people aged 15 to 64 in Estonia have a paid job, close to the OECD employment average of 65%. Some 70% of men are in paid work, compared with 65% of women, suggesting that women are able to successfully balance family and career. People in Estonia work 1 889 hours a year, more than the OECD average of 1 765 hours. Another key measure, however, is how many people work very long hours. Some 4% of employees work very long hours, much lower than the OECD average of 9%; about 5% of men work very long hours compared with 2% for women.
Having a good education is an important requisite for finding a job. In Estonia, 89% of adults aged 25-64 have earned the equivalent of a high-school degree, considerably higher than the OECD average of 75%. In contrast to most OECD countries, more women have completed high school, at 91%, compared with 86% for men. Estonia is a top-performing country in terms of the quality of its educational system. The average student scored 526 in reading literacy, maths and science in the OECD’s Programme for International Student Assessment (PISA). This score is much higher than the OECD average of 497, making Estonia one of the strongest OECD countries in students’ skills. On average in Estonia, girls outperformed boys by 14 points, more than the average OECD gap of 8 points.
In terms of health, life expectancy at birth in Estonia is 76 years, four years lower than the OECD average of 80 years. Life expectancy for women is 81 years, compared with 71 for men. The level of atmospheric PM10 – tiny air pollutant particles small enough to enter and cause damage to the lungs –is 9.3 micrograms per cubic meter, considerably lower than the OECD average of 20.1 micrograms per cubic meter. Estonia performs less well in terms of water quality, as 80% of people say they are satisfied with the quality of their water, below the OECD average of 84%.
Concerning the public sphere, there is a strong sense of community and moderate levels of civic participation in Estonia, where 89% of people believe that they know someone they could rely on in time of need, in line with the OECD average. Voter turnout, a measure of public trust in government and of citizens’ participation in the political process, was 64% in the most recent elections, below the OECD average of 72%. Social and economic status can affect voting rates; voter turnout for the top 20% of the population is an estimated 68% and for the bottom 20% it is an estimated 56%, slightly broader than the OECD average gap of 11 percentage points.
In general, Estonians are less satisfied with their lives than the OECD average, with 74% of people saying they have more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc.) than negative ones (pain, worry, sadness, boredom, etc.). This figure is lower than the OECD average of76%.
OECD in Action
OECD Economic Outlook 2013: Estonia
This chapter on Estonia provides major economic trends and prospects for the next two years.Read this chapter
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Estonia in Detail
Housing – Estonia expand
Living in satisfactory housing conditions is one of the most important aspects of people’s lives. Housing is essential to meet basic needs, such as shelter, but it is not just a question of four walls and a roof. Housing should offer a place to sleep and rest where people feel safe and have privacy and personal space; somewhere they can raise a family. All of these elements help make a house a home. And of course there is the question whether people can afford adequate housing.
Housing costs take up a large share of the household budget and represent the largest single expenditure for many individuals and families, by the time you add up elements such as rent, gas, electricity, water, furniture or repairs. In Estonia, households on average spend 20% of their gross adjusted disposable income on keeping a roof over their heads, below the OECD average of 21%.
In addition to housing costs it is also important to examine living conditions, such as the average number of rooms shared per person and whether households have access to basic facilities. In Estonia, 77% of people say they are satisfied with their current housing situation, much less than the OECD average of 87%. This low level of subjective satisfaction reflects Estonia’s mixed performance in objective housing indicators.
The number of rooms in a dwelling, divided by the number of persons living there, indicates whether residents are living in crowded conditions. Overcrowded housing may have a negative impact on physical and mental health, relations with others and children’s development. In addition, dense living conditions are often a sign of inadequate water and sewage supply. In Estonia, the average home contains 1.6 rooms per person, in line with the OECD average. In terms of basic facilities, 91.4% of people in Estonia live in dwellings with private access to an indoor flushing toilet, less than the OECD average of 97.9% and one of the lowest rates across the OECD.
More ResourcesHow's Life? at a Glance
Income – Estonia expand
While money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being. Higher economic wealth may also improve access to quality education, health care and housing.
Household net-adjusted disposable income is the amount of money that a household earns each year after taxes and transfers. It represents the money available to a household for spending on goods or services. In Estonia, the average household net-adjusted disposable income per capita is 14 382 USD a year, lower than the OECD average of 23 938 USD.
Household financial wealth is the total value of a household’s financial worth. In Estonia, the average household net financial wealth per capita is estimated at 7 843 USD, much lower than the OECD average of 42 903 USD. While the ideal measure of household wealth should include non-financial assets (e.g. land and dwellings), such information is currently available for only a small number of OECD countries.
Despite a general increase in living standards across OECD countries over the past fifteen years, not all people have benefited from this to the same extent. In Estonia, the average net adjusted disposable income of the top 20% of the population is an estimated 28 006 a year, whereas the bottom 20% live on an estimated 5 287 USD a year.
More ResourcesHow's Life? at a Glance
Jobs – Estonia expand
Having a job brings many important benefits, including: providing a source of income, improving social inclusion, fulfilling one’s own aspirations, building self-esteem and developing skills and competencies. In Estonia, nearly 67% of the working-age population aged 15 to 64 has a paid job. This figure is higher than the OECD employment average of 65%. Employment rates are generally higher for individuals with a higher level of education; in Estonia an estimated 82% of individuals with at least a tertiary education have a paid job, compared with an estimated 32% for those without an upper secondary education. This 50 percentage point difference is larger than the OECD average of 33 percentage points and suggests the job market in Estonia is highly restrictive.
Women are still less likely than men to participate in the labour market. In Estonia, 65% of women have jobs. This is higher than the OECD average of 57% and relatively close to the 70% employment rate of men in Estonia. This 5 percentage point gender difference is much smaller than the OECD average of 16 percentage points and suggests Estonia has been successful in addressing the constraints and barriers women face in accessing work.
Young Estonians, aged 15-24, however face difficulties, with an unemployment rate of 19.9% compared with the OECD average of 16.3%.
Unemployed persons are defined as those who are not currently working but are willing to do so and actively searching for work. Long-term unemployment can have a large negative effect on feelings of well-being and self-worth and result in a loss of skills, further reducing employability. In Estonia, the percentage of the labour force that has been unemployed for a year or longer is currently at 5.5%, higher than the OECD average of 2.7%. There is little difference on average between men and women in the OECD area when it comes to long-term unemployment. In Estonia, however, the difference is relatively high with an unemployment rate of 6.0% for men and 4.9% for women.
The wages and other monetary benefits that come with employment are an important aspect of job quality. In Estonia, people earn 17 488 US dollars per year on average, much less than the OECD average of 41 010 USD. Not everyone earns that amount however. Whereas the top 20% of the population earn an estimated 22 908 USD per year, the bottom 20% live on an estimated 9 237 USD per year.
Another essential factor of employment quality is job security. Workers facing a high risk of job loss are more vulnerable, especially in countries with smaller social safety nets. In Estonia, workers face a 5.3% chance of losing their job, in line with the OECD average.
Better Policies for Better Lives
Fostering youth entrepreneurship
Estonia faces a double challenge of high youth unemployment and lack of entrepreneurial culture among its young people. The “Be Enterprising” programme, targeted at 14-19 year-olds, is designed to promote creativity, an enterprising attitude, problem solving skills and risk management knowledge.
ENTRUM (Youth Entrepreneurship Development Programme) provides three modules of entrepreneurship training as well as access to a professional network that includes business professionals and successful entrepreneurs.
More than 1 100 students, 60% of them women, took part in ENTRUM in 2010-2012. Participants have started 59 businesses, the most successful of which has more than 60 employees. The project has received a number of awards, including a Swedish Business Award in 2011.
More ResourcesWell‑being in the workplace: Measuring job quality
Community – Estonia expand
Humans are social creatures. The frequency of our contact with others and the quality of our personal relationships are thus crucial determinants of our well-being. Helping others can also make you happier. People who volunteer tend to be more satisfied with their lives than those who do not. Time spent volunteering also contributes to a healthy civil society. On average, people in Estonia spend 1 minute per day in volunteering activities, less than the OECD average of 4 minutes. Around 36% reported having helped a stranger in the last month, also less than the OECD average of 49%.
A strong social network, or community, can provide emotional support during both good and bad times as well as provide access to jobs, services and other material opportunities. In Estonia, 89% of people believe that they know someone they could rely on in a time of need, in line with the OECD average. There is a 1 percentage point difference between men and women, as 89% of men believe they have this kind of social support, compared with 88% of women. While on average there is a clear relationship between the availability of social support on the one hand, and people’s education level on the other, in Estonia the level of social support is similar across society: around 88% of people who have completed primary education report having someone to count on for help in times of need, compared to 89% for people who attained tertiary education.
A weak social network can result in limited economic opportunities, a lack of contact with others, and eventually, feelings of isolation. Socially isolated individuals face difficulties integrating into society as a contributing member and fulfilling personal aspirations.
More ResourcesHow's Life? at a Glance OECD Insights: Human Capital
Education – Estonia expand
A well-educated and well-trained population is essential for a country’s social and economic well-being. Education plays a key role in providing individuals with the knowledge, skills and competences needed to participate effectively in society and in the economy. Having a good education greatly improves the likelihood of finding a job and earning enough money. Across OECD countries, 83% of people with university-level degrees have a job, compared with 55% for those with only a secondary school diploma. Lifetime earnings also increase with each level of education.
Following a decline in manual labour over previous decades, employers now favour a more educated labour force. High-school graduation rates therefore provide a good indication of whether a country is preparing its students to meet the minimum requirements of the job market.
In Estonia, 89% of adults aged 25-64 have earned the equivalent of a high-school degree, much higher than the OECD average of 75%. Across the OECD, slightly more men aged 25-64 have the equivalent of a high-school degree compared with women from the same age group. In Estonia, however, the opposite is true as 91% of women have successfully completed high-school compared with 86% of men. Among younger people – a better indicator of Estonia’s future –86% of 25-34 year-olds have earned the equivalent of a high-school degree, also higher than the OECD average of 82%.
Estonians can expect to go through 17.5 years of education between the ages of 5 and 39, close to the OECD average of 17.7 years. This level of education expectancy echoes Estonia’s good performance in the educational attainment of its 25-34 year-old population.
But graduation rates, while important, speak little to the quality of education received. The OECD’s Programme for International Student Assessment (PISA) reviews the extent to which students have acquired some of the knowledge and skills that are essential for full participation in modern societies. In 2012, PISA focused on examining students’ reading ability, skills in maths and level in sciences, as research shows that these skills are more reliable predictors of economic and social well-being than the number of years spent in school.
Estonia is a top-performing OECD country in reading literacy, maths and sciences with the average student scoring 526. This score is higher than the OECD average of 497, making Estonia one of the strongest OECD countries in students’ skills. On average in Estonia, girls outperformed boys by 14 points, more than the average OECD gap of 8 points,
The best-performing school systems manage to provide high-quality education to all students. In Estonia, the average difference in results, between the students with the highest socio-economic background and the students with the lowest socio-economic background, is 62 points, much lower than the OECD average of 96 points and the lowest gap amongst OECD countries. This suggests the school system in Estonia provides relatively equal access to high-quality education.
More ResourcesHow's Life? at a Glance
Environment – Estonia expand
The quality of our local living environment has a direct impact on our health. Having access to green spaces for example, is essential for quality of life. An unspoiled environment is a source of satisfaction, improves mental well-being, allows people to recover from the stress of everyday life and to perform physical activity. In Estonia, 11% of people feel they lack access to green spaces or recreational areas, slightly less than the 12 % average of OECD European countries.
Outdoor air pollution is one important environmental issue that directly affects the quality of peoples’ lives. Despite national and international interventions and decreases in major pollutant emissions, the health impacts of urban air pollution continue to worsen, with air pollution set to become the top environmental cause of premature mortality globally by 2050. Air pollution in urban centres, often caused by transport and the use of small-scale burning of wood or coal, is linked to a range of health problems, from minor eye irritation to upper respiratory symptoms in the short-term and chronic respiratory diseases such as asthma, cardiovascular diseases and lung cancer in the long-term. Children and the elderly may be particularly vulnerable.
PM10 – tiny particulate matter small enough to be inhaled into the deepest part of the lung – is monitored in OECD countries because it can harm human health and reduce life expectancy. In Estonia, PM10 levels are 9.3 micrograms per cubic meter, the lowest rate in the OECD where the average is of 20.1 micrograms per cubic meter and much lower than the annual guideline limit of 20 micrograms per cubic meter set by the World Health Organization.
Access to clean water is fundamental to human well-being. Despite significant progress in OECD countries in reducing water pollution, improvements in freshwater quality are not always easy to discern. In Estonia, 80% of people say they are satisfied with water quality, lower than the OECD average of 84%.
More ResourcesOECD Environmental Outlook to 2030 How's Life?: Work and Life Balance
Governance – Estonia expand
Trust in government is essential for social cohesion and well-being. In Estonia, 26% of people say they trust their national government, less than the OECD average of 39%. High voter turnout is another measure of public trust in government and of citizens’ participation in the political process. In the most recent elections for which data is available, voter turnout in Estonia was 64% of those registered. This figure is lower than the OECD average of 72%.
Even if the right to vote is universal in all OECD countries, not everyone exercises this right. There is little difference in the voting rates of men and women in most OECD countries. In Estonia, however, women outvote men by an estimated 6 percentage points. Income can also have a strong influence on voter turnout. In Estonia, voter turnout for the top 20% of the population is an estimated 68%, whereas the participation rate of the bottom 20% is an estimated 56%. This 12 percentage point difference is slightly higher than the OECD average difference of 11 percentage points.
Ensuring that government decision making is not compromised by conflicts of interest is key to maintaining trust in government. Transparency is therefore essential to hold government to account and to maintain confidence in public institutions.
Freedom of information laws (FOI) allow the possibility for individuals to access undisclosed information. For such policies to be successful, the public should have a clear understanding of their rights under the law, should be able to file requests with ease and should be protected against any possible retaliation. People in Estonia can file a request for information either in writing, online, by telephone or in person – thus greatly facilitating the FOI process. There are even provisions for anonymity – an important protection that few OECD countries have adopted. There is not yet, however, built-in protection from retaliation.
Better Policies for Better Lives
Boosting effective citizen involvement
Effective citizen consultation is critical to gaining society’s agreement as to how Estonia’s growing wealth should be used. The Estonian Constitution, government rules and rules for drafting laws include elements of participatory democracy. Promising initiatives include the creation of www.osale.ee, where individuals and NGOs can publicly give their opinion about draft legislation. The website has over 3 000 registered users ranging from individual citizens to representatives of professional organisations and civil society organisations.
The government is also paying special attention to training civil servants on engaging civil society organisations and the public in policy making. Courses are based on citizen engagement principles and participatory practices and include stakeholders and civil society organisations.
Examples of public participation in action include Kambja, in south-eastern Estonia, where ZZ Youth, a local civil society organisation has been entrusted by the local government to plan and manage the services of the Open Youth Centre. This experience shows how partnerships with non-government actors can help respond to a community need which could not have been met by local government acting alone due to limited resources.
More ResourcesHow's Life? at a Glance
Health – Estonia expand
Most OECD countries have enjoyed large gains in life expectancy over the past decades, thanks to improvements in living conditions, public health interventions and progress in medical care. Life expectancy at birth in Estonia stands at 76 years, 4 years below the OECD average of 80 years. Life expectancy for women is 81 years, compared with 71 for men, a much wider difference than the average OECD gender gap of six years, with a life expectancy of 83 years for women and 77 for men.
Higher life expectancy is generally associated with higher healthcare spending per person, although many other factors have an impact on life expectancy (such as living standards, lifestyles, education and environmental factors). Total health spending accounted for 5.9% of GDP in Estonia, lower than the average of 9.4% in OECD countries and the lowest share among OECD countries. Estonia also ranks below the OECD average in terms of total health spending per person, at 1 303 USD in 2011, compared with an OECD average of 3 322 USD. Between 2000 and 2010, total health spending in Estonia increased in real terms by 5.1% per year on average, a faster growth rate than the OECD average of 4.0%, but slowed down to 1.2%% in 2011.
Throughout the OECD, tobacco consumption and excessive weight gain remain two important risk factors for many chronic diseases. In Estonia, daily smoking rates stand at 26.2% of the adult population, above the OECD average of 20.9%. In many OECD countries, large proportions of the population are overweight or obese. In Estonia, the obesity rate among adults based on self-reported height and weight is 16.9%, below the OECD average of 17.2%. Obesity’s growing prevalence foreshadows increases in the occurrence of health problems (such as diabetes, cardiovascular diseases and asthma), and higher health care costs in the future.
When asked, “How is your health in general?”52% of people in Estonia reported to be in good health, less than the OECD average of 69%. Despite the subjective nature of this question, answers have been found to be a good predictor of people’s future health care use. Gender, age and social status may affect answers to this question. On average in OECD countries, men are more likely to report good health than women, with an average of 72% for men and 67% for women. In Estonia, the average is 55% for men and 50% for women. Not surprisingly, older people report poorer health, as do those who are unemployed, or who have less education or income. About 75% of adults with a disposable income in the top 20% in Estonia rated their health as ‘good’ or ‘very good’, compared to about 39% for those with a disposable income in the bottom 20%.
More ResourcesHow's Life? at a Glance
Life Satisfaction – Estonia expand
Happiness or subjective well-being can be measured in terms of life satisfaction, the presence of positive experiences and feelings, and the absence of negative experiences and feelings. Such measures, while subjective, are a useful complement to objective data to compare the quality of life across countries.
Life satisfaction measures how people evaluate their life as a whole rather than their current feelings. It captures a reflective assessment of which life circumstances and conditions are important for subjective well-being. When asked to rate their general satisfaction with life on a scale from 0 to 10, Estonians gave it a 5.4 grade, one of the lowest scores in the OECD, where average life satisfaction is 6.6.
There is little difference in life satisfaction levels between men and women across OECD countries. This is true in Estonia, where both men and women gave their life a 5.4 grade. Education levels can, however, influence subjective well-being. Whereas people who have only completed primary education in Estonia have a life satisfaction level of 5.3, this score reaches 6.0 for people with tertiary education.
Happiness, or subjective well-being, is also measured by the presence of positive experiences and feelings, and/or the absence of negative experiences and feelings. In Estonia 74% of people reported having more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc.) than negative ones (pain, worry, sadness, boredom, etc.). This figure is lower than the OECD average of 76%.
More ResourcesHow's Life? at a Glance
Safety – Estonia expand
Personal security is a core element for the well-being of individuals, and largely reflects the risks of people being physically assaulted or falling victim to other types of crime. Across the OECD, assault rates have generally declined in the past five years. In Estonia, 5.5% of people reported falling victim to assault over the previous 12 months, more than the OECD average of 3.9%. There is little difference between men and women in assault rates, at respectively 5.4% and 5.6%.
The homicide rate (the number of murders per 100,000 inhabitants) is a more reliable measure of a country’s safety level because, unlike other crimes, murders are usually always reported to the police. According to the latest OECD data, Estonia’s homicide rate is 4.7, higher than the OECD average of 4.1. In Estonia, the homicide rate for men is 8.0 compared with 1.7 for women.
Fear of crime is another important indicator as it can constrain behaviour, restrict freedom and threaten the foundation of communities. Despite a general reduction in assault rates in the past five years, in many OECD countries feelings of security have declined. In Estonia, 64% of people feel safe walking alone at night, lower than the OECD average of 69%. While men are at a greater risk of being victims of assaults and violent crimes, women report lower feelings of security than men. This has been explained by a greater fear of sexual attacks, the feeling they must also protect their children and their concern that they may be seen as partially responsible.
More ResourcesHow's Life? at a Glance
Work-Life Balance – Estonia expand
Finding a suitable balance between work and life is a challenge for all workers, especially working parents. Some couples would like to have (more) children, but do not see how they could afford to stop working. Other parents are happy with the number of children in their family, but would like to work more. This is a challenge to governments because if parents cannot achieve their desired work/life balance, not only is their welfare lowered but so is development in the country.
People spend one-tenth to one-fifth of their time on unpaid work. The distribution of tasks within the family is still influenced by gender roles: men are more likely to spend more hours in paid work, while women spend longer in unpaid domestic work. Men in Estonia spend 169 minutes per day cooking, cleaning or caring, more than the OECD average of 141 minutes but still less than Estonian women who spend 288 minutes per day on average on domestic work.
Another important aspect of work-life balance is the amount of time a person spends at work. Evidence suggests that long work hours may impair personal health, jeopardize safety and increase stress. People in Estonia work 1 889 hours a year, much more than the OECD average of 1 765 hours. Another key measure, however, is how many people work very long hours. The share of employees working more than 50 hours per week is not very large across OECD countries. In Estonia, about 4% of employees work very long hours, less than the OECD average of 9%. Overall, men spend more hours in paid work: in Estonia 5% of men work very long hours, compared with 2% of women.
The more people work, the less time they have to spend on other activities, such as time with others or leisure. The amount and quality of leisure time is important for people’s overall well-being, and can bring additional physical and mental health benefits. In Estonia,full-time workers devote 62% of their day on average, or 14.9 hours, to personal care (eating, sleeping, etc.) and leisure (socialising with friends and family, hobbies, games, computer and television use, etc.) slightly less than the OECD average of 15 hours. Fewer hours in paid work for women do not necessarily result in greater leisure time. In Estonia, men devote nearly 15 hours per day to personal care and leisure and women approximately 14 hours.