Unemployment Fund: War in Ukraine may drive unemployment up to 10 percent

The Estonian Unemployment Insurance Fund (Töötukassa) office on Tartu's Vaksali Street,
The Estonian Unemployment Insurance Fund (Töötukassa) office on Tartu's Vaksali Street, Source: Aili Vahtla/ERR

As a result of impacts of the war in Ukraine, unemployment in Estonia may reach up to 10 percent, the Estonian Unemployment Insurance Fund said. The last time the country saw such a high unemployment rate was in 2012.

Even prior to the escalation of the war in Ukraine in late February, Estonia had adopted the course of helping arriving war refugees find work as quickly as possible. Nonetheless, forecasts regarding the number of arrivals have changed constantly.

The Estonian government is now basing all of its calculations on the possibility that up to 100,000 refugees may reach Estonia. According to Katrin Liivamets, head of the Jobseeker and Employer Services Department at the Unemployment Insurance Fund, some 40 percent of these in turn may reach the country's job market.

"According to our estimates, we may see an average of some 10,000 people a month actively seeking work via the Unemployment Insurance Fund," Liivamets said. "Some are working, some are coming and registering, and some are going on to work."

Approximately 45,000 active job-seekers are currently registered with the fund, and the official said that they need to take into account that there may be job losses as well in connection with the war in Ukraine and sanctions against Russia and Belarus.

"We've been basing [our work] on the Ministry of Finance's flash estimate," she said. "And based on that, we can expect that we'll be seeing an additional 15,000 new unemployed persons per month."

Based on these figures, Estonia's unemployment rate may jump to 10 percent. This in itself isn't an unprecedented rate; it was 10 percent in 2012, and in 2010, for example, unemployment in Estonia stood at 16 percent. The potential situation this time, however, is nonetheless unconventional.

"Even in terms of just languages," Liivamets explained. "Among the arrivals are people whose Russian skills aren't on par, and who will be facing a very significant language barrier. And we are certainly short on interpreting services."

Should economic growth continue at the same pace as it did prior to February 24, the Ministry of Social Affairs' goal of helping arriving refugees find work within a month or two could be realized. Should the economy suffer, however, everything will be more difficult.

"Among them are people who have already started work, who are about to start work, and who know they're going to receive a residency permit and will be [starting work] soon," she said. "But it may take longer for others."

As there is a shortage of temporary accommodations in the bigger cities, refugees are being taken to other parts of Estonia by bus.

Most jobs, however, are nonetheless in the country's biggest urban centers, primarily in Tallinn and Tartu. "Nearly half of all of our job offers are in Tallinn and Harju County; some 10 percent are in Tartu County, 5-7 percent are in Pärnu County and Ida-Viru County," Liimets said, adding that a relatively tiny portion of jobs are available in all remaining counties.


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Editor: Aili Vahtla

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