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References 1. Anspal S., Järve, J., Jääts, K., Kallaste, E., Maar, K., Mägi, A., Toots, A. (2012), Programmi “Kvalifitseeritud tööjõu pakkumise suurendamine 2007–2013” teenuste hindamine. Palgatoetuse ja tööturuteenuste vahehindamine. Eesti Rakendusuuringute Keskus Centar, InterAct Projektid & Koolitus OÜ. 2. Bank of Estonia (2006). Tööturu ülevaade. 3. Caballero, R. J., Cowan, K., Engel, E. M.R.A, Micco, A. (2004). Effective Labour Regulation and Microeconomic Flexibility. Cambridge: National Bureau of Economic Research, Working Paper, 10744. http://www.nber.org/papers/w10744 (05.04.2012). 4. Eamets, R. (2011). “Labour Market, Labour Market Flexibility and the Economic Crisis in the Baltic States,” Estonian Human Development Report 2010/2011. Baltic Way(s) of Human Development: Twenty Years On. Tallinn: Estonian Cooperation Assembly, 75–82. 5. Eamets, R.; Leetmaa, R. (2009). “Tööturg ja sellega seostuvad poliitikad,” Eesti Inimarengu Aruanne. Tallinn: Eesti Ekspress Press, 138–147. 6. Eamets, R., Masso, J. (2005). “Labour Market Flexibility and Employment Protection regulation in the Baltic States,” European Journal of Industrial Relations Vol. 11, No 1, 2005, 71-90. 7. Eesti rahvusvaheline konkurentsivõime 2011 aastaraamat. Eesti konkurentsivõime maailma 59 riigi ja Euroopa Liidu 24 liikmesriigi võrdluses (Leev Kuum, ed.). Enterprise Estonia, State Chancellery, Estonian Institute of Economic Research. 8. Employment Committee (EMCO) (2009a). Monitoring and Analyses of Flexicurity Policies. http://ec.europa.eu/social/main. jsp?catId=102&langId=en. 9. Employment Committee (EMCO) (2009b). Reports Issue 1. Employment Guidelines 2009. Indicators for Monitoring and Analysis in the NRPs 2009. http://ec.europa.eu/social/main. jsp?catId=89&langId=en&newsId=591&furtherNews=yes. 10. Estonian Unemployment Insurance Fund, Analysis Department (2013). Tööpraktika mõjuanalüüs. 11. European Commission (2003). The European Union Labour Force Survey: Methods and Definitions – 2001. Office for Official Publications of the European Communities. http://epp.eurostat. ec.europa.eu/cache/ITY_OFFPUB/KS-BF-03-002/EN/KS-BF-03- 002-EN.PDF. 12. Ilmarinen, J. (1999) Ageing Workers in the European Union: Status and Promotion of Work Ability, Employability and Employment. Helsinki: Finnish Institute of Occupational Health and Ministry of Social Affairs and Health. 13. Krillo, K., Eamets, R. (2010) Kuivõrd kajastavad tööturu jäikuse indeksid tegelikke erinevusi riikide vahel? EuroCollege Centre for Applied Research, University of Tartu. 14. Krillo, K., Nurmela, K., Eamets, R., Philips, K. (2010) Elukestva õppe roll turvalise paindlikkuse kujundamisel Eestis. EuroCollege Centre for Applied Research, University of Tartu. 15. Lauringson, A. (2012). The Impact of the Generosity of Unemployment Benefits on Estonian Labour Market Outcomes in a Period of Crisis. (Doctoral thesis, University of Tartu) Tartu: Tartu University Press. 16. Lauringson, A., Villsaar, K. Tammik,L., Luhavee, T. (2011). Tööturukoolituse mõjuanalüüs. Eesti Töötukassa analüüs. Tallinn, 1–97. 17. Leetmaa, R., Masso, M., Võrk, A., Karu, M., Veldre, V., Paulus, A., Turk, P. (2012). Sotsiaalkaitsehüvitiste ja -toetuste mõju töömotivatsioonile. PRAXIS Center for Policy Studies. Tallinn. 18. Malk, L. (2012). Töölepingu seaduse roll turvalise paindlikkuse kujundamisel Eestis. Master’s thesis. Tallinn University of Technology. 19. Muffels, R., Chung, H., Fouarge, D., Klammer, U., Luijkx, R., Manzoni, A., Thiel, A., Wilthagen, T. (2008). Flexibility and Security over the Life Course. Dublin: European Foundation for the Improvement of Living and Working Conditions. http:// www.lex.unict.it/eurolabor/documentazione/altridoc/Flexibility_life_course_Feb_08.pdf (30.03.2012). 20. OECD (2012). Employment Outlook 2012. 21. Seifert, H., Tangian, A. (2007). Flexicurity: Reconciling Social Security with Flexibility – Empirical Findings for Europe. Düsseldorf: WSI-Diskussionpapier no. 154. http://www.boeckler.de/ pdf/p_wsi_diskp_154_e.pdf (10.02.2012). 22. Venn, D. (2012). Eligibility Criteria for Unemployment Benefits: Quantitative Indicators for OECD and EU Countries, OECD Social, Employment and Migration Working Papers, No. 131, OECD Publishing, 62. 23. Võrk, A., Kaarna, R., Nurmela, K., Osila, L., Leetmaa, R. (2010). Aktiivse tööpoliitika roll turvalise paindlikkuse kujundamisel Eestis. PRAXIS Center for Policy Studies. Tallinn. Toimetis nr 1/2010. 24. Võrk, A., Nurmela, K., Karu, M., Osila, L. (2010). Sotsiaalkaitsesüsteemi roll turvalise paindlikkuse kujundamisel Eestis. PRAXIS Center for Policy Studies. Tallinn. Toimetis nr 2/2010. 172 Estonian Human Development Report 2012/2013
4.4 Productivity and the economic structure Uku Varblane, Urmas Varblane In the long term, productivity 1 is the most important competitiveness factor and source of economic growth. It plays this role in both the national economy and in individual companies. The stable growth of productivity at the company level enables large profits to be earned, real wages to be increased, new investments to be made in technologies and product development, new channels to be developed for entering foreign markets, etc. All the aforementioned increase the competitiveness of business enterprises in domestic and foreign markets. A competitive business sector, in turn, forms a strong basis for the national economy, and thereby, the growth of productivity is directly related to the improvements in the standard of living – when the real income growth of people allows for an increase in the consumption of goods and services, investment in education etc. The level of productivity and its speed of growth are affected, in turn, by many factors – both inside and outside the business enterprises. The most important internal factors are the range of products, equipment, materials and energy used in production, as well as the human resources and working methods involved. The external productivity factors can be accommodated under the concept of the economic environment (see chapter 4.1.) and divided into institutions (e.g. infrastructure, legislation, the education system) and socio-economic factors (e.g. demographic changes, changes in the economic structure and technological progress). Countries are constantly competing to attract capital and labour, by trying to provide more favourable business environments based on a physical and institutional infrastructure (Sinn 2002). In the same way, firms compete for their major production factors. Their success depends on how well they are able to sell goods and services and earn a profit. However, the ability to earn a profit depends to a great extent on the efficiency, or productivity, of utilising the production factors. In this way, the connection between the levels of competitiveness and productivity of both countries and companies is revealed. Paul Krugman, a Nobel laureate in economics, has stated that the concept of competitiveness, which he believes is only a political concept, is used excessively in the assessment of the economic competitiveness of countries. Instead, the productivity levels of the states should be compared, which he believes form the fundamental content of competitiveness. However the equivalency of productivity and competitiveness is a simplification, because competitiveness, as a phenomenon, has several levels, and the definition of the indicators that characterise and impact it, depend on the level of the analysis, whereas it is sensible to differentiate between direct and indirect factors. For example, the productivity gap between the European Union and the U.S., which has emerged since the late 1990s, is often associated with the European Union’s weak competitiveness, thereby recognising the connection between the level of productivity and competitiveness. At the same time, there is a need to go further with the analysis and to explain the deeper reasons for this gap. 4.4.1 Measures of productivity Why do we need to measure productivity? Measuring productivity actually fulfils several important objectives. • Assessing the standard of living. By measuring productivity, we can provide an assessment of the population’s standard of living in the given state. Empirical studies have shown a close connection between the income levels of a state’s residents and the productivity indicators. • Assessing technological change. By measuring productivity, we can provide an assessment of the state’s technological development – whether this has resulted in shifts in various branches of the economy, and whether progress is being made in the direction of best practice. • Assessing efficiency. In this case, we can provide an assessment of whether the results have achieved a sensible utilisation of resources in the economic sense. This is also accompanied by the determination of real costs savings (see OECD, 2001). There are different possible ways of measuring productivity. The choice of the indicators for measurement depends on the level of analysis, the objectives of measuring the 1 The concept of productivity was probably used in scientific literature for the first time by French economist F. Quesnay, in 1766. Productivity is a very broad concept, which includes several different aspects and levels. Most generally, productivity is understood as the ratio of output(s) to input(s) (Syverson 2011). In this ratio, the denominator may be comprised of one input (partial productivity); two or more combined inputs (divisor group productivity), or all the inputs (total productivity). The concepts with broader meaning that are related to productivity are profitability, which considers the impact of price changes; and performance, which is the most general concept, and includes earning capacity and other factors independent of price (quality, speed, distribution, flexibility). In Estonian, confusion has been cause by the interpretation of the closely related concepts of effectiveness and efficiency. The first means “doing the right things”, i.e. the ability to reach a desired objective. The second concept’s meaning is that “things must be done right”, and it characterises how well the existing resources are used to achieve the objectives, and whether a saving of resources was achieved or an overrun developed. Therefore, the concept of effectiveness is used when one is focused on the outputs of the production chain; and the efficiency concept is used to asses how well the production operation uses the inputs (Coelli et al., 2005). Estonian Human Development Report 2012/2013 173
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ESTONIAN HUMAN DEVELOPMENT REPORT 2
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Table of Contents 1 Human Capital /
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Dear Reader Since the moment when E
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1Human Capital Estonian Human Devel
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the HDI’s content has also been h
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Figure 1.1.1 The human development
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Figure 1.1.7 The income sub-index:
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The results of the Princeton Projec
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the hypothetical generation. The to
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Figure 1.2.3 Life expectancy. Eston
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Table 1.2.2 also presents the most
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The new trends that are appearing i
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Figure 1.2.8 Components of populati
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New features were introduced into E
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Initiation of Voluntary Birth Contr
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Table 1.3.1 Best-known educational
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(OECD 2012b). Therefore a certain r
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The reciprocal dependence of the pr
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Figure 1.3.8 Percentage of students
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Table 1.3.4 The quality of educatio
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1.4 Health Raul-Allan Kiivet Change
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Table 1.4.1 Usage of prescription m
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allude to the fact that approximate
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promote healthy lifestyles among th
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Figure 1.5.1 The World Values Surve
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Table 1.5.2 Estonia’s participati
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Figure 1.5.3 The percentage of the
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Figure 1.5.5 Percentage of the Esto
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The fact that Estonia’s position
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Summary Mati Heidmets The global vi
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2People and Society Estonian Human
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Table 2.1.1 Structure of the Bertel
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tioning market economies (15 states
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2.2 Freedom and democracy Martin M
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Table 2.2.1 Democracy indicators Po
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Figure 2.2.2 The distribution of th
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would be something that none of the
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political participation are general
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strongest, while a very small perce
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is concerned, Estonia is one of the
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Figure 2.4.2 Average circulation of
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2.5 Corruption Jüri Saar In accord
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Lithuania, 61%; and in Russia, 69%.
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2.6.2 Intentional homicides in Esto
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crime. And thirdly, there was a wis
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References 1. Ahven, A. & Tabur, L.
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states included in the EU Kids Onli
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2.8 Public assessments of the state
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Figure 2.8.4 Changes releated to tr
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of the state’s development are en
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Table 2.9.1 The positions of Estoni
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3. IEP (2011). Structures of Peace.
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3Welfare and the Quality of Life Es
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choices made, not what people say t
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Figure 3.1.5 Public social spending
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tion agreed upon the social contrac
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References 1. Aidukaite, J. (2006).
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hand, to the “inequality of acces
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and explanations of the extent of i
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5- much more than I deserve. Some d
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Page 125 and 126: Table 3.3.1 Experienced Well-Being
Page 127 and 128: at about 70%. In Latvia and Lithuan
Page 129 and 130: sign. It seems that the usual view
Page 131 and 132: 3.4 Quality of life Anu Toots 3.4.1
Page 133 and 134: a uniform composite indicator has n
Page 135 and 136: 3.4.6 The components of life qualit
Page 137 and 138: Figure 3.4.4c Perceived quality of
Page 139 and 140: Figure 3.4.5 Changes in the depriva
Page 141 and 142: 3.5 Environment dimension of well-b
Page 143 and 144: Figure 3.5.1.b Estonia’s position
Page 145 and 146: 3.5.4 Energy intensity The energy i
Page 147 and 148: productivity, which is defined as t
Page 149 and 150: perceive themselves as worse off th
Page 151 and 152: 4The Economy Estonian Human Develop
Page 153 and 154: vide a valuable connection for maki
Page 155 and 156: Figure 4.1.3 Components of economic
Page 157 and 158: ule of law, the sub-indicators for
Page 159 and 160: References 1. Acemoglu, D.; Robinso
Page 161 and 162: Development Report employs generali
Page 163 and 164: and pasture land, and this was capi
Page 165 and 166: Basing the total and net savings re
Page 167 and 168: 4.3 Labour market Reelika Leetmaa,
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Page 171 and 172: • Expenditures for active labour
Page 173: who lose their jobs. These ensure i
Page 177 and 178: labour costs at the company level r
Page 179 and 180: Table 4.4.4 Comparison of the produ
Page 181 and 182: Figure 4.4.1 Annual average increas
Page 183 and 184: 4.5 Innovation Erik Terk, Katrin M
Page 185 and 186: Table 4.5.2 Comparison of innovatio
Page 187 and 188: Table 4.5.4 Comparison of the indic
Page 189 and 190: in order to make the R&D potential
Page 191 and 192: It is characteristic of the South K
Page 193 and 194: mechanisms for increasing their sta
Page 195 and 196: Globalisation and Policy Patterns 5
Page 197 and 198: When Estonia regained its independe
Page 199 and 200: 5.2 The impacts of globalisation an
Page 201 and 202: Table 5.2.2 Support of the differen
Page 203 and 204: 5.3 Development policies Erik Terk,
Page 205 and 206: • C -the “Estonia-centred” su
Page 207 and 208: Figure 5.4.1 Support for the possib
Page 209: Summary Erik Terk Estonia is part o
Page 212 and 213: ehavioural patterns. Therefore, it
Page 214 and 215: EDR 2012/2013 authors Clemens Buche
Page 216 and 217: EDR 2012/2013 authors Alari Purju i
Page 218: Editor-in-Chief: Mati Heidmets Prod
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