Thursday, June 25, 2009

Poverty levels in Estonia hold steady

A new survey conducted by Statistics Estonia shows that 19 percent of Estonia's population lives in relative poverty. The country in Europe's Baltic region is one of the top ten poorest countries in Europe.

From Baltic business News, writer Marge Tubalkain-Trell details the survey.

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.

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