Economic recession has significantly increased the risk to fall into poverty

Last year and the current year have been quite complicated for Estonia. The conjuncture in economy and on the labour market has worsened rapidly and this has significantly influenced the economic coping of many people.

Individual estimation about economic coping is important to evaluate poverty risks and define the potential groups who need assistance. According to the data of the Labour Force Survey, in the 4th quarter of 2007, 60% of the population in age group 15–74 coped well. 31% coped with some difficulties and 9% coped with great difficulties. For the 4th quarter of 2009 the number of persons coping well had decreased to less than half (to 48%). 37% of persons coped with some difficulties and 15% with great difficulties.

Unemployed and long term unemployed persons (the persons who have been seeking for a job 12 months or longer) are among those who have the biggest risks of not coping. In the 4th quarter of 2009, the percentage of long term unemployed persons among the unemployed increased significantly. Difficulties in finding a new job have entailed more interest in jobs not typical of Estonia. The small number of fixed term jobs is typical of Estonia and this has not changed during the economic recession either. At the same time the number of unemployed persons ready to accept fixed term jobs has increased significantly.

In the 4th quarter of 2007, 57% of unemployed persons looked for a permanent job. 39% of the unemployed persons looking for a permanent job would have accepted also a fixed term job. In the 4th quarter of 2009, 32% of the unemployed looked for a permanent job only and 63% would have accepted also a fixed term job. It also indicates to the fact that the economic situation of many households has become so difficult that people are willing to accept any job to improve the household’s economic situation. The rapid growth of persons who have problems with coping, difficulties of the unemployed persons in returning to the labour market and a substantial decrease of their income predict the growth of inequality and stratification in the society.

Different persons assess their own coping from different initial standpoints which depend, for instance, on previous consumption habits, on the comparison of their own opportunities against those of friends and acquaintances, etc. Own evaluation of coping also reflects the general feeling of confidence and sufficiency of resources necessary for everyday life, thus serving in a sense as a subjective estimation of poverty.

A more detailed analysis could be read in the publication “Vaesus Eestis. Poverty in Estonia”, published today, on February 26th by Statistics Estonia (/uudised/38022).