Estonian Human Development Report

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Figure 6.4.5. Public expenditures on labour market policy supports in the EU countries in 2006 (% of GDP per one percentage point of the unemployment rate) 0.6 0.5 0.4 0.3 0.2 0.1 0 Denmark* The Netherlands Austria Finland Belgium Germany Ireland Spain Portugal EU15 France EU27 Cyprus Sweden Luxembourg Italy Slovenia Malta Poland Hungary Greece* Latvia Romania United Kingdom Czech Republic Slovakia Lithuania Bulgaria ESTONIA * 2004 data for Denmark, 2005 data for Greece Source: Eurostat, author’s calculations Public sector expenditures for social protection in Estonia are among the lowest in the European Union. In 2006, social protection expenditures in Estonia constituted 12.4% of GDP, while the EU27 average was 26.9% of GDP (Eurostat). In case of unemployment the benefits and assistance related to job loss are of primary importance, and these have been among the lowest in Estonia compared to other EU countries 43 . In the EU the expenditures on these benefits average nearly 1.2% of the GDP, while in Estonia the corresponding expenditures are only in the range of 0.08%, which is the lowest compared to the other EU countries. On the other hand, Denmark even spends 2.7% of GDP on unemployment benefits and Germany spends almost 2.1%. Estonia’s expenditures are the lowest even if we consider the differences in the unemployment rates of different countries (see Figure 6.4.5.). Therefore, one can conclude that generally social security during an unemployment period in Estonia is among the lowest compared to the rest of Europe. Estonia’s low social benefits generally encourage people to remain employed. Income earned from employment usually exceeds income from social benefits, since both unemployment and subsistence benefits are significantly lower than wages and the labour taxes paid by employees are not high. An international comparison also shows that in the Estonian tax and benefits system people have greater financial incentives to work than in the majority of other European Union states (Võrk et al 2007, Eurostat). However, the current social protection system could be made more supportive of employment. Firstly, the benefits system could do more to support those who only work part time. This would help to preserve or more quickly restore people’s connections to the labour market and would also increase families’ incomes. Currently in Estonia, we are sometimes dealing with a situation where parttime employment does not increase a person’s total income but rather reduces it since all social benefits are lost (see Võrk & Paulus 2006). For instance, people lose their entire unemployment insurance benefits even if they start working at jobs with very small workloads. People are also deprived of their early retirement benefits if they continue working before the official retirement age. In some cases, a person’s employment in a low-paying or part-time job can be inhibited by the subsistence benefits system, since subsistence benefit are reduced by an amount that equals the person’s wages. Although the opportunity to work and receive wages is partially built into the parental benefits system, studies point to fact that the speed of high-salaried women returning to the labour market has declined due to parental benefits (Võrk, Karu & Tiit 2009). Another example of how the system in Estonia lengthens the duration of unemployment is the simultaneous receipt of redundancy payment and unemployment insurance benefits. Research has shown (see Leetmaa & Võrk 2004 and 2006) that the receipt of redundancy payment lengthens the duration of unemployment even when we take into account the impact of other factors with the help of statistical models (we account for age, gender, length of service in the company, previous salary, region, size of the layoffs). Therefore, a small portion of those who have lost their jobs, i.e. those who get both redundancy payments and unemployment insurance benefits (almost 0.3% of the employed in 2005) are well protected and the income they receive at the beginning of the unemployment spell as benefits exceeds wages by 1.5 times. Those laid off in the public sector can feel especially secure, since their redundancy payment can equal a year’s salary. However, the level of social security for the majority of unemployed is low. For instance, in 2007, only 23% of the newly unemployed people registered by the Labour Market Board received unemployment insurance benefits and approximately 46% received unemployment assistance benefits. Almost a third of the registered unemployed did not receive any benefits, although they had the opportunity to apply for subsistence benefits. At the same time, the rapid employment growth in recent years and empirical research (see Võrk & Paulus 2006) show that during the period of economic growth, the social benefits system as a whole has not reduced people’s motivation to go to work. However, there is reason to believe that the connection between work incentives and social benefits on the one hand and part-time employment on the other will become important again when wage growth starts to slow down significantly in the next few years and finding jobs becomes increasingly difficult again. As mentioned above, the reconciliation of work and family life plays an important role in the concept of flexicurity. The obligation of caring for children and other 43 Eurostat treats labour market policy (LMP) supports as out-of-work income maintenance and support (mostly unemployment benefits) and early retirement benefits that are paid due to reasons resulting from the labour market. The proportion of early retirement benefits that are paid based on reasons resulting from the labour market in relation to the entire expenditures on LMP supports is quite small (see Eurostat). In most countries, a more important role is played by early retirement benefits that are part of the pension system and are one of the most important reasons for older workers to leave the labour market. In Estonia to date early retirement benefits have also been part of the general pension system and been financed from pension insurance payments. Research conducted in Estonia has shown that the main reason for taking early retirement is already being unemployed (Leppik et al 2004). | 144
family members is considered to be one of the main factors inhibiting women’s employment and gender equality in the labour market. The availability of childcare service has continually been a problem in Estonia. In 2002–2008, 40–50% of local governments had kindergarten waiting lists (Ainsaar, Soo 2008). In 2004, almost 16,000 children were on kindergarten waiting lists (Kask, Rummo-Laes et al 2005). Also, kindergartens were overcrowded – there are almost 2,500 more children in kindergartens than there are normative places (Statistics Estonia database). In 2006, 18% of children under three received childcare services and 85% of older children received at least one hour, but the majority over 30 hours (Leetmaa, Karu 2008). The averages of EU countries were 26% and 84% respectively (Eurostat 2008). The objective of the European Union for 2010 is to provide childcare services to 33% of children under the age of three and to 90% of those over three. In addition to formal childcare services, a third of children under three were in the care of grandparents and other people, seldom professional childminders and then only for 2.5 hours per week on average (Leetmaa, Karu 2008). Therefore, parents are those who primarily mind small, under-three-year-olds, which is clearly discernible in employment statistics – the employment rate of women with under-six-year-olds in 2006 was 25.7 percentage points lower than that of childless women (the EU average is 13.6 percentage points) (European Commission 2008). Lifelong learning In addition to the training of unemployed people, an important part of the concept of flexicurity involves the training of workers. As shown in last year’s Human Development Report, Estonia ranks among the bottom third of the EU member states with respect to adult education or about 6.5% of adults in Estonia participated in lifelong learning (Human Development Report, 2007). Below, we make a closer examination of participation in adult education, by using two surveys that were conducted recently – Adult Education in Enterprises 2006 (and a similar survey from 2000 for comparison) and the 2007 Estonian Adult Education Survey (personal survey). The primary focus of these analyses was the participation of 20–64-year-old employed persons in training and the provision of training in companies with at least 10 employees 44 . Participation in training. Of the 315,000 men included in the sample, 134,000 (42.7%) had received some sort of training; the corresponding indicators for women were 314,000 and 166,000 (52.8%). In addition, especially in the case of women, it is people with higher qualifications and levels of education that received training. Women with low qualifications, who are actually in the worst position in the labour market, receive comparatively less training. A good example are the layoffs at Narva Kreenholm this year, where hundreds of people who lost their jobs due to the closing of the enterprise did not benefit from active labour market policies until after the company had closed, and they were already unemployed. Unfortunately, there is no system of preventive Table 6.4.3. The workers that have participated in adult education by gender and occupation Participants in Total adult education 20–64-year-olds, % Men Women Men Women Total 100% 100% 100% 100% Managers, professionals* 32% 48% 43% 63% Other white-collar workers** 2% 8% … 8% Blue-collar workers *** 66% 45% 55% 29% *Managers, professionals, legislators, senior officials and managers; middle-level professional and technicians, officials. ** Other white-collar workers; officials. *** Blue-collar workers: service and sales personnel; skilled agricultural and fishery workers; skilled workers and craftspeople; equipment and machinery operators; unskilled workers; armed forces. Source: Estonian Labour Force Survey. Table 6.4.4. The participation of 20–64-year-olds in adult training during the last 12 months (Gender, educational level, and training provider) 2007 Ratio (total people completing training=100), % training in Estonia, which would deal with people who are about to become unemployed. When people are asked their reasons for participating in training, the primary reason is clearly their jobs – training is needed primarily for their jobs. Of women, 86% of the training participants thought so; among men, the indicator was even greater – 90%. Among men, 30–39-year-olds are the most active training participants; while among women, it is both 30– 39 and 40–49-year olds, with about 50% of the workers in the corresponding age groups participating in training (Figure 6.4.6.). It is principally large enterprises that deal with worker training (250 and more workers), with over 90% of these companies dealing with worker training (Figure 6.4.7.). The average indicator was near 70%, with small businesses around 60%. If the sample had included micro enterprises, which are actually most numerous today on the entrepreneurial landscape, the average indicator would have been significantly lower. Summary Total training providers In the workplacetöökoht School, educational institutions, training company Other agency, company Nonprofit organization Men 100.0 35.7 40.2 14.3 6.1 .. In summary, I would like to stress that while the role of social partners in the regulations of issues related to the labour market is relatively modest in Estonia our corresponding governmental regulations are still relatively Other training organizer Women 100.0 27.1 47.4 11.9 9.0 4.6 Comment: If the person participated in several trainings during the last 12 months. Source: Statistics Estonia 44 The general sample of the survey comprised companies with at least 10 employees that were included in the commercial register as of 2005 and were engaged in a principal activity related to the survey . 145 |
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Estonian Human Development Report
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Estonian Human Development Report T
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4.2. Ethnic differentiations in sat
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Preface This year, the Estonian Hum
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CHAPTER 1 Estonian Human Developmen
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Figure 1.1.3. Life expectancy in co
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Figure 1.2.2. Life expectancy at bi
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to reality. The greatest inaccuracy
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Figure 1.2.9. Internal migration ev
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12. Marksoo, A. 1992. “Dynamics o
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Table 1.3.1. PISA 2006 study result
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Table 1.3.2. Number of students in
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1.4. The gross domestic product and
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Figure 1.4.3. Estonian GDP (right a
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1.5. Changes in the Estonian Human
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2.2. Health of Estonian residents i
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Table 2.2.4. Differences in life ex
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Figure 2.4.1. Healthy life years of
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Figure 2.4.4. Various accidents, tr
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2.5. Lifestyle and behaviour as a s
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Figure 2.5.5. Smoking in Estonia in
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Figure 2.6.1. Overview of the compo
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Table 2.6.2. Use of specialized med
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dren. The majority of services are
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Figure 2.8.2. How much a health dis
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2.10. Policy recommendations aimed
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CHAPTER 3 Quality of life and life
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Table 3.2.1. Characteristics of liv
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Table 3.2.4. An assessment of the e
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Figure 3.2.4. Difference in the job
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Table 3.2.6. Agreement with stateme
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Figure 3.3.1. Satisfaction with lif
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Figure 3.3.4. Percentage of people
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Figure 3.4.1. Types of quality of l
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Figure 3.5.1. Percentage of teenage
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Figure 3.5.4. Percentage of respond
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Arieh A., Conti C., Kutsar D., Nicg
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Figure 3.6.2. Subjective quality of
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Pieper, A. Sixsmith, Care related q
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Figure 3.7.1. The placement of Euro
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Figure 4.2.1. Life satisfaction by
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Table 4.2.1. Factors forming genera
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Annexes Annex 4.2.1. Socio-demograp
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Figure 4.3.1. Changes in the assess
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Figure 4.3.4. Attitudes of the Esto
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olds considered themselves to be pa
Page 96 and 97: Table 4.4.3. Agreement of the Russi
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Page 100 and 101: Figure 4.5.4. Certainty of Estonian
Page 102 and 103: mote equal opportunities. At the (e
Page 104 and 105: CHAPTER 5 Quality of life in a cons
Page 106 and 107: Figure 5.2.1. GDP and AIC per capit
Page 108 and 109: Figure 5.2.3. Distribution of consu
Page 110 and 111: Figure 5.2.4. Indexes of environmen
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Page 114 and 115: Figure 5.3.3. Comparison of types o
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Page 120 and 121: Table 5.4.3. Young people’s asses
Page 122 and 123: Figure 5.4.6. Time spent on the con
Page 124 and 125: Table 5.4.6. The perception of prob
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Page 128 and 129: Table 6.2.1. Objective and subjecti
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Page 134 and 135: Figure 6.3.1. GDP, government secto
Page 136 and 137: Figure 6.3.3. Employed 15-74-year-o
Page 138 and 139: Figure 6.3.8. Percentage of social
Page 140 and 141: References 1. Aaviksoo, A., G. Paat
Page 142 and 143: Figure 6.4.1. Labour market flexibi
Page 144 and 145: Figure 6.4.3. Creations of jobs ind
Page 148 and 149: Figure 6.4.6. Ratio of the particip
Page 150 and 151: 6.5. Cities as development engines
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Page 154 and 155: have been underfinanced or are not
Page 156 and 157: Table 7.1. Factors that favour and
Page 158 and 159: Table 7.2. Potential economic devel
Page 160 and 161: Authors Chapter 1 Ene-Margit Tiit,
Page 162 and 163: Margit Keller (PhD) is a Senior Res
Page 164 and 165: Special prizes Estonian Human Devel
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Page 172 and 173: Honorable mentions Estonian Human D
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