There are two definitions of poverty: absolute poverty and relative poverty. The absolute poverty indicates the bare minimum threshold acceptable for living, while for relative poverty the cut-off is 60 percent of the median income, i.e. the income of half of the population earning less and half earning more.

While the percentage of people living in absolute poverty in Estonia has steadily decreased*, the relative poverty rate has actually increased in recent years, reaching almost a quarter of the total population.

So who is more at risk of ending up among the poor, facing poverty in Estonia? Poverty numbers in Estonia reveal enormous regional disparities: poverty rates are nearly twice as high in South-Eastern and Eastern Estonia than in Tallinn.

There was a lot of discussion regarding large families in the framework of the new family benefits law; the data, however, suggests that single parents are at the greatest risk of poverty, while families with two or more children face the same risk as families with three or more children.

It is also useful to look at the role of various types of benefits and pensions, or social transfers, in poverty alleviation.

Unfortunately, Estonia lags behind other European countries in terms of the extent to which social payments can reduce relative poverty rates.

While social transfers can lower poverty rates by more than half in Finland, Norway and Ireland, the amount in Estonia is nearly twice lower. Thus, the Estonian social protection system has not done enough to help alleviate poverty in the country.

*According to the most recent statistics, about 48,000 people lived in absolute poverty in 2022, up from 18,000 in 2021, a two-and-a-half-fold increase. Last year, about 303,900 people lived in relative poverty, nearly 3,000 more than in 2021.

--

Follow ERR News on Facebook and Twitter and never miss an update!