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The problems include the very limited availability of skilled<br />
labour (58th position in 2012); lack of labour with financial<br />
knowledge (57th); the lack of competent managers (57th);<br />
risk of a brain drain (51st); and very limited attractiveness<br />
for foreign skilled labour (51st). One of the possible reasons<br />
for the scarcity of skilled labour is the non-conformity<br />
of the workers’ educational levels to the demands of the<br />
labour market and the insufficient training of workers,<br />
which is alluded to by the positions that Estonia achieved<br />
in the Global Competitiveness Index (Table 1.3.4 in<br />
sub-chapter 1.3, which deals with education.)<br />
Based on the labour market indicators used for the<br />
IMD ranking, one of Estonia’s relative strengths is the high<br />
participation of women in the labour market (1st in 2011,<br />
and also in a leading position in previous years). As far as<br />
labour costs are concerned, Estonia ranks in the middle of<br />
the IMD sub-index (23rd); and also in the middle of company<br />
managers’ assessment of constructive employment<br />
relationships (21st) and the employment rate (32nd.)<br />
In the IMD indices related to employment, the Asian<br />
states rank at the top. In the employment sub-indices<br />
from 2008 to 2011, China, Thailand, Qatar and Singapore<br />
headed up the rankings. This reflects the size of the<br />
labour markets and high employment rates in these countries.<br />
The states that appeared at the top of the labour<br />
market sub-index in various years included Singapore,<br />
Thailand, the Philippines and Hong Kong. Of the other<br />
Asian states, which were chosen as reference states for<br />
Estonia (Table 4.3.1), Taiwan, South Korea have also been<br />
ranked higher than Estonia in competitiveness; while<br />
among the European reference states, Switzerland and the<br />
Netherlands, which have higher employment rates and<br />
highly qualified labour according to the assessments of<br />
employers, are at the forefront. A more detailed comparison<br />
of the employment indicators of the European Union<br />
and OECD states alludes to the fact that Estonia lags<br />
behind many states due to the percentage of employed<br />
persons in the population, although the ones who are<br />
employed work long hours. In 2011, Estonia’s employment<br />
rate for 15- to 64-year-olds (the most commonly<br />
used age group in international comparisons) was 65.1%<br />
according to Eurostat data, while the rate was 79.3% in<br />
Switzerland, 74.1% in the Netherlands, and 74.1% in Sweden<br />
(see Figure 4.3.1).<br />
A large number of part-time employees are the reason<br />
for the high employment rates in Europe, and therefore,<br />
the average annual number of working hours per<br />
employed person in these states is not high. If part-time<br />
employees in Estonia comprise 9.3% of all employment<br />
(2011), in Switzerland it is 33.9%, in the Netherlands,<br />
48.5% and in Sweden, 24.7%. As a result, the number<br />
of working hours per employed person in Estonia is significantly<br />
higher than in these states. (Based on OECD<br />
data, it was even 1,924 hours in Estonia in 2011 2 ; 1,632<br />
in Switzerland, 1,379 in the Netherlands, and 1,644 in<br />
Sweden). The combined impact of the hours worked<br />
and the employment rate gives us the number of annual<br />
working hours per working-age person, which, among<br />
the states under observation, is highest in Switzerland,<br />
Figure 4.3.1<br />
Employment rate for 15- to 64-year olds, and the annual<br />
working hours per worker and person, 2011<br />
Annual working hours per worker<br />
Annual working hours per person<br />
Working hours<br />
Switzerland<br />
New Zealand<br />
Chile<br />
Estonia<br />
Canada<br />
Sweden<br />
Czech<br />
Republic<br />
Finland<br />
Austria<br />
OECD<br />
Israel<br />
Greece<br />
Denmark<br />
Slovenia<br />
Slovakia<br />
Luxembourg<br />
Netherlands<br />
Germany<br />
Italy<br />
Belgium<br />
Spain<br />
France<br />
Ireland<br />
Employment rate<br />
0 500 1000 1500 2000<br />
Percentage 0 20 40 60 80<br />
Source: Eurostat, table, Employment rates by sex, age and<br />
nationality (%); OECD, OECD.StatExtracts, table “Average annual<br />
hours actually worked per worker”, last viewed on 01.02.13; the<br />
authors’ computations.<br />
New Zealand, Chile and Estonia. In Estonia, this totalled<br />
1,253 hours in 2011, which is significantly higher than<br />
the average for the OECD states (1,151 hours).<br />
Therefore, based on the example of other states,<br />
Estonia does not need to increase the number of working<br />
hours per person, as much as it needs to reduce the<br />
number of unemployed and inactive people, including by<br />
increasing part-time work.<br />
The change in the age structure of the population<br />
has a long-term impact on the labour market. While,<br />
at the beginning of 2011, 62% of Estonia’s population<br />
2 At the same time, in the IMD Index, only 1,762 working hours per year are used for Estonia in 2011.<br />
Estonian Human Development Report 2012/2013<br />
167