According to information released by Statistics Estonia on Monday morning, 276,000 people, or 21.1 percent of the Estonian population, lived in relative poverty in 2016, down 0.6 percent compared to the previous year.
In 2016, the income of the Estonian population increased and income inequality remained on the same level as the previous year. Social transfers, i.e. state benefits and pensions, helped prevent part of the population from falling into poverty, as had they not been included in income, 39.2 percent of the population would have lived in relative poverty.
The percentage of people living in relative poverty has remained on the decline for the past four years, having fallen from 21.8 percent in 2013 to 21.1 percent in 2016.
In 2016, a person was considered to be living in relative poverty if their equalized monthly disposable income was below €468 (€432 in 2015). In 2016, the difference in incomes of the poorest and richest quintiles of the population was 5.8-fold.
Compared to 2015, the relative poverty rate has decreased in the case of children, young and middle-aged people, but has increased in the case of the elderly. In 2016, 41.8 percent of persons aged 65 and over lived in relative poverty, compared to 40.2 percent in 2015. In 2016, 16.5 percent of children under 18 lived in relative poverty, indicating a two-percent drop compared to the previous year.
A higher level of education is an important prerequisite for the prevention of poverty, according to Statistics Estonia. In 2016, the relative poverty rate of persons with higher education was 13 percent, of persons with basic education or lower 36.7 percent. In the case of persons with higher education, the relative poverty rate was almost three times lower than in the case of persons with basic education or lower.
The relative poverty rate as defined by Statistics Estonia is the share of persons with equalized yearly disposable income lower than the relative poverty threshold. The relative poverty threshold is 60 percent of the median equalized yearly disposable income of household members. Equalized disposable income is the total household income divided by the sum of equivalence scales of all household members.
Editor: Aili Vahtla