Estonian Human Development Report

than the average income. Elderly people living alone and
single parents have the lowest incomes (about half of the
average income and one and a half times lower than the
average income, respectively) (Table 3.2.2.). Incomes have
grown approximately 1.6 times within the last four years,
and the incomes of all household types have grown more
or less equally, although the incomes of older people have
increased less than the average income.
Instead of the average income, the quality of life related
to the material resources of the households is better characterized
by the income/poverty line ratio 12 . According to the
data of Statistics Estonia, two-parent families with children
have the smallest risk of relative poverty (11% for two-parent
families with one or two children, 20% for two-parent families
with three and more children), while single-member
households and single-parent households have the largest
risk (50% and 44%, respectively). There has been practically
no change in the poverty risk of families with children in
recent years, but the poverty risk of single-member households
has increased from 30% in 2000 to 50% in 2006.
An analysis of the difference in the poverty rates
of men and women in 2002–2006 shows that men’s and
women’s poverty rates are levelling off in the younger age
groups, but among people aged 65 and over, the poverty
rate of women is nearly twice as high as that of men. In
the case of education, the poverty rate of people with basic
education and lower education grew to 43% in 2006, while
the poverty risk of individuals with secondary education
or higher education remained the same (20% and 10%,
respectively) (based on data from Statistics Estonia).
Two indicators are used to assess the changes of the
households’ economic situation: the relative income position
of various types of households in comparison to the
general income 13 and the relative importance of housing
costs in the income in 1994 and 2006. In over ten years,
the percentage of housing costs in incomes has decreased
by nearly ten points, which indicates that income growth
has exceeded the increase in housing costs (Table 3.2.3.).
In the context of the overall reduction of residential
expenses, the decrease in housing costs has been quickest
among households without children (both single-person
households and households comprising several individuals).
The relative income position has improved the most in
the case of single-member households, while at the same
time the relative income position of two-parent families
with children has deteriorated by 14 percentage points.
Summarizing the results provided above, we can conclude
that the general income growth has affected different
types of households in different ways. A deepening
age polarization can be seen in the case of single-member
households – the incomes of young people living
alone have increased significantly compared to earlier
years, while pensions have increased at a slower rate than
incomes in general, causing the relative poverty risk of
elderly people to grow. A trend towards the equalization
of incomes is evident in the case of two-parent families
with children. Both the number of families at risk of poverty
and the general income level compared to the average
income have decreased.
Table 3.2.2. Monthly equivalent income 11 of
households, 2003–2006 (EEK)
Type of household 2003 2004 2005 2006
Change
2003–2006
Total 4230 4733 5678 6913 1.63
Household without children 4126 4563 5647 6694 1.62
Single-person household 3125 3474 4469 5152 1.65
Single person under 65 3766 4103 5568 6441 1.71
Single person 65 and older 2404 2752 3121 3598 1.50
Couple without children, at
least one of whom is under 65
Couple over 64, without
children
Other household without
children
5101 5743 7140 8599 1.69
3235 3662 4204 5065 1.57
4593 4966 6127 7262 1.58
Household with children 4310 4861 5702 7097 1.65
Adult and child(ren) 2603 3197 3684 4422 1.70
Source: Statistics Estonia, 2008
Table 3.2.3. Changes in the relative household
income levels* and the relative importance of housing
costs in incomes during 1994–2006
Income
Housing costs
1994 2006 Change 1994 2006 Change
Single-person household 90 100 +10% 40 29 -11%
Two-parent family with
children
Single-parent family with
children
Family of two adults
without children
Other families with
children
Other families without
children
110 96 - 14% 21 17 -4%
74 71 -3% 38 29 -9%
106 108 +2% 23 17 -6%
92 94 +2% 19 12 -7%
127 126 -1% 22 12 -10%
All households 28 19 -9%
* the median income of the corresponding household as a percentage of
the overall median income
Source: Estonian living conditions survey (1994) and EU SILC (2006)
Satisfaction with the material situation. In studies of
quality of life, much attention has been devoted to the
connection between one’s material situation and satisfaction
with life. Satisfaction with one’s material situation is
strongly dependent on the income level of the household
(Table 3.2.4.). Households whose income per household
member exceeds 5000 kroons consider themselves able to
cope at their current income level (86%). However, in the
case of households where the income is lower than 3000
kroons per household member, 38% consider coping to be
difficult and 16% consider it very difficult.
The following table (Table 3.2.5.) provides information
regarding the satisfaction of respondents with their
11
Income per household, divided by the sum of weighted consumption units of household members (equivalence scales used: 1:0.5:0.3)
12
Percentage indicates the relative importance of people whose equivalent net income was below the relative poverty line (Statistics Estonia).
13
Proportion of the median income of the given household to the overall median income
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