Social Policies
#11Key Findings
Despite gaps in some areas, Estonia scores well in international comparison (rank 11) with respect to social policies. Its score in this area has improved by 0.2 points relative to 2014.
Educational outcomes are generally very strong, but a high share of the unemployed have tertiary degrees. Policymakers are thus seeking to strengthen links between education and labor-market needs. Social transfers have not kept pace with wage increases, exacerbating relative poverty. Regional and gender income disparities are significant.
Healthcare coverage is largely tied to employment or education status, leaving some without free access. Recent reforms have improved access. The social exclusion of ethnic minorities has decreased over time. Ethnic minority children are increasingly learning in Estonian-language classrooms, improving integration.
Parental leave benefits are generous, but prioritize stay-at-home parents over working parents. Access to childcare is good for over-threes. A policy allowing early withdrawal of voluntary-pillar pension funds has sharply exacerbated sustainability risks in the system. Crime levels have declined in recent years, but drug trafficking and cybercrimes are increasing.
Educational outcomes are generally very strong, but a high share of the unemployed have tertiary degrees. Policymakers are thus seeking to strengthen links between education and labor-market needs. Social transfers have not kept pace with wage increases, exacerbating relative poverty. Regional and gender income disparities are significant.
Healthcare coverage is largely tied to employment or education status, leaving some without free access. Recent reforms have improved access. The social exclusion of ethnic minorities has decreased over time. Ethnic minority children are increasingly learning in Estonian-language classrooms, improving integration.
Parental leave benefits are generous, but prioritize stay-at-home parents over working parents. Access to childcare is good for over-threes. A policy allowing early withdrawal of voluntary-pillar pension funds has sharply exacerbated sustainability risks in the system. Crime levels have declined in recent years, but drug trafficking and cybercrimes are increasing.
Graph View
Graph View
To what extent does education policy deliver high-quality, equitable and efficient education and training?
10
9
9
Education policy fully achieves the criteria.
8
7
6
7
6
Education policy largely achieves the criteria.
5
4
3
4
3
Education policy partially achieves the criteria.
2
1
1
Education policy does not achieve the criteria at all.
Estonians have traditionally placed a high value on education, which has been a driving force behind the country’s excellent educational outcomes (e.g., reflected in PISA results). Particular system strengths include the small number of low achievers and low school-level variance in student achievement. Enrollment rates at all education levels are above the international average.
Municipalities provide preschool education, which is accessible to the great bulk of the population (the enrollment rate is about 95%). Earlier concerns regarding a shortage of places in urban areas and low salary levels for teachers have been solved. Education at public institutions is free at all levels and there are various social support measures for students, such as free school lunches and transport through school buses. Vocational education and training (VET) students have access to subsidized dormitories and there are needs-based allowances for university students.
Interestingly, while tertiary-level education is generally associated with improved employability and higher salaries, this appears less true in Estonia than elsewhere. 30% of registered unemployed persons have completed higher education, while 27% have completed VET (Töötukassa 2021), which highlights a mismatch between the education system and labor market situation. Recent policy measures strengthening links between education and training and the labor market (e.g., involving companies and social partners in VET curricula development, which includes entrepreneurship skills in university curricula, and providing adults with skill levels better access to lifelong learning) have sought to ensure that the provision of education keeps pace with the changing needs of the economy.
Citations:
Töötukassa (2021). Majandusaasta aruanne 2020. Tallinn. https://www.tootukassa.ee/sites/tootukassa.ee/files/tootukassa_aastaaruanne_2020.pdf (accessed 02.01.2022)
Municipalities provide preschool education, which is accessible to the great bulk of the population (the enrollment rate is about 95%). Earlier concerns regarding a shortage of places in urban areas and low salary levels for teachers have been solved. Education at public institutions is free at all levels and there are various social support measures for students, such as free school lunches and transport through school buses. Vocational education and training (VET) students have access to subsidized dormitories and there are needs-based allowances for university students.
Interestingly, while tertiary-level education is generally associated with improved employability and higher salaries, this appears less true in Estonia than elsewhere. 30% of registered unemployed persons have completed higher education, while 27% have completed VET (Töötukassa 2021), which highlights a mismatch between the education system and labor market situation. Recent policy measures strengthening links between education and training and the labor market (e.g., involving companies and social partners in VET curricula development, which includes entrepreneurship skills in university curricula, and providing adults with skill levels better access to lifelong learning) have sought to ensure that the provision of education keeps pace with the changing needs of the economy.
Citations:
Töötukassa (2021). Majandusaasta aruanne 2020. Tallinn. https://www.tootukassa.ee/sites/tootukassa.ee/files/tootukassa_aastaaruanne_2020.pdf (accessed 02.01.2022)
Graph View
To what extent does social policy prevent exclusion and decoupling from society?
10
9
9
Policies very effectively enable societal inclusion and ensure equal opportunities.
8
7
6
7
6
For the most part, policies enable societal inclusion effectively and ensure equal opportunities.
5
4
3
4
3
For the most part, policies fail to prevent societal exclusion effectively and ensure equal opportunities.
2
1
1
Policies exacerbate unequal opportunities and exclusion from society.
In general terms, the Estonian welfare system resembles the liberal welfare model. Levels of poverty and inequality remain higher than the OECD average. Work-related income has significantly increased, but so have the wage disparities that maintain the relative poverty rate. Social transfers have not followed step with wage increases, resulting in increased levels of relative poverty among the retired, the unemployed and families dependent on social benefits. In the non-working population, poverty is highest among the elderly. There are also gender and regional disparities in poverty indicators. The absence of effective regional policy has accelerated the exodus of the working-age population from rural areas. This, in turn, puts an additional burden on families and makes the formulation of sound social policy all the more difficult.
Overall, anti-poverty policy remained unchanged in 2019–2021. Some temporary support schemes were introduced at the end of 2021 to compensate for the sharp increase in living costs due to rallying energy and electricity prices. Families with net income below the national median can apply for compensation; the scheme will be effective until April 2022.
Even though the social exclusion of ethnic minorities has decreased, partly owing to government integration programs, unemployment and poverty rates remain somewhat higher among minority groups. Subjective perceptions are also critical – compared to ethnic Estonians, the ethnic minority population perceives greater inequalities in opportunity in all life domains. Only one-fifth of residents of other nationalities consider their own material well-being and opportunities equal, while 73% consider the situation of Estonians to be better. 70% of people of other nationalities see no opportunities to influence Estonian society (EIM 2020).
Citations:
EIM 2020. Estonian Integration Monitoring 2020. Fact sheet on equal opportunities. https://www.kul.ee/en/estonian-integration-monitoring-2020 (accessed 03.01.2022)
Overall, anti-poverty policy remained unchanged in 2019–2021. Some temporary support schemes were introduced at the end of 2021 to compensate for the sharp increase in living costs due to rallying energy and electricity prices. Families with net income below the national median can apply for compensation; the scheme will be effective until April 2022.
Even though the social exclusion of ethnic minorities has decreased, partly owing to government integration programs, unemployment and poverty rates remain somewhat higher among minority groups. Subjective perceptions are also critical – compared to ethnic Estonians, the ethnic minority population perceives greater inequalities in opportunity in all life domains. Only one-fifth of residents of other nationalities consider their own material well-being and opportunities equal, while 73% consider the situation of Estonians to be better. 70% of people of other nationalities see no opportunities to influence Estonian society (EIM 2020).
Citations:
EIM 2020. Estonian Integration Monitoring 2020. Fact sheet on equal opportunities. https://www.kul.ee/en/estonian-integration-monitoring-2020 (accessed 03.01.2022)
Graph View
To what extent do health care policies provide high-quality, inclusive and cost-efficient health care?
10
9
9
Health care policy achieves the criteria fully.
8
7
6
7
6
Health care policy achieves the criteria largely.
5
4
3
4
3
Health care policy achieves the criteria partly.
2
1
1
Health care policy does not achieve the criteria at all.
Estonia has a social insurance-based healthcare system, which includes some non-Bismarckian features such as general practitioners. The insurance principle makes access to healthcare services dependent on labor market status. Working-age people who are not in employment or education are not covered by the national health insurance. On average, 6% of the population are not guaranteed free access to healthcare due unemployment or irregular work contracts; the problem is worse among men, ethnic minorities and young people aged 26–30. The minister of social affairs started a discussion on universal healthcare already in 2018, although government cabinets have not made any progress on the issue.
Instead of the major reform, some smaller measures have been implemented in order to improve the system’s inclusiveness and quality. Uninsured people are included in screening programs of major oncological diseases (2021), e-consultations of special care doctors have been launched (2020) and a nationwide e-booking system has been opened (2019). The latter two measures were especially important to address large regional inequalities in access to high-quality hospital care.
In contrast to coverage and access issues, the quality of healthcare and the efficiency of the healthcare system in Estonia is good, despite a level of expenditure well below the OECD average.
Instead of the major reform, some smaller measures have been implemented in order to improve the system’s inclusiveness and quality. Uninsured people are included in screening programs of major oncological diseases (2021), e-consultations of special care doctors have been launched (2020) and a nationwide e-booking system has been opened (2019). The latter two measures were especially important to address large regional inequalities in access to high-quality hospital care.
In contrast to coverage and access issues, the quality of healthcare and the efficiency of the healthcare system in Estonia is good, despite a level of expenditure well below the OECD average.
Graph View
To what extent do family support policies enable women to combine parenting with participation in the labor market?
10
9
9
Family support policies effectively enable women to combine parenting with employment.
8
7
6
7
6
Family support policies provide some support for women who want to combine parenting and employment.
5
4
3
4
3
Family support policies provide only few opportunities for women who want to combine parenting and employment.
2
1
1
Family support policies force most women to opt for either parenting or employment.
Estonia inherited a tradition of double-breadwinner families from Soviet times, when mothers typically worked full time. Despite huge social changes, this family pattern has continued, as evidenced by the high female employment rate. Family policy has persistently been high on the political agenda due to the country’s low fertility rate and labor market needs. Estonia has one of the most generous parental benefit systems in the OECD, entitling parents of newborns to benefits equal to her/his previous salary for 435 days. This system, which has been in place since 2004, has been revised several times in order to make it more flexible and gender neutral. The amendments have extended the period in which parents can take parental leave from one and a half years to three years, and parental leave can now be divided over several periods according to the parents’ choice. Another important change was an effective increase in fathers’ parental role, as the joint parental leave period was extended to two months and paid leave for fathers was extended by 30 days. The latest amendments (which have been in force since April 2022) grant parents an extra 10 days of paid holiday per parent until the child reaches 14 years of age.
While the parental benefit system prioritizes stay-at-home parents over working parents of small children, access to preschool childcare is generally good for over-threes and reasonably affordable. Only 5% of preschoolers did not attend a nursery because of a lack of places. Limited capacity for special needs children has recently been identified as a significant issue (Lang et al. 2021)
Citations:
Lang et al. (2021) Alushariduse ja lapsehoiu uuring. https://www.sm.ee/sites/default/files/alushariduse_ja_lapsehoiu_uuring.pdf
While the parental benefit system prioritizes stay-at-home parents over working parents of small children, access to preschool childcare is generally good for over-threes and reasonably affordable. Only 5% of preschoolers did not attend a nursery because of a lack of places. Limited capacity for special needs children has recently been identified as a significant issue (Lang et al. 2021)
Citations:
Lang et al. (2021) Alushariduse ja lapsehoiu uuring. https://www.sm.ee/sites/default/files/alushariduse_ja_lapsehoiu_uuring.pdf
Graph View
To what extent does pension policy realize goals of poverty prevention, intergenerational equity and fiscal sustainability?
10
9
9
Pension policy achieves the objectives fully.
8
7
6
7
6
Pension policy achieves the objectives largely.
5
4
3
4
3
Pension policy achieves the objectives partly.
2
1
1
Pension policy does not achieve the objectives at all.
Estonia has had a three-pillar pension system since 2002. In 2019, a reform of the mandatory second pillar was provoked by the poor performance of pension funds, high administrative costs and minimal choice for citizens. Despite legal amendments that relaxed investment restrictions and imposed reduced rates for administration costs, the conservative Pro Patria party’s plan to make the second pillar voluntary and allow people to withdraw their funds before retirement was implemented in 2021. By the end of 2021, 24% of all second pillar assets that were owned by the 23% of insured people aged under 60 were withdrawn. Nearly half (48%) of leavers composed people aged 35–49, which is seen as one of the major sustainability risks.
Making the second pillar voluntary puts additional pressure on the first, PAYG pillar. The public pension fund is already running an annual deficit close to 2% of GDP and political promises to increase pensions extraordinary, beyond indexation could further undermine sustainability. Regardless of annual indexation, the average level of a public old-age pension is modest (€591 per month) and poverty among the elderly remains a concern.
Citations:
ERR (2021). https://www.err.ee/1608162478/teisest-sambast-lahkujad-votavad-valja-1-29-miljardit-eurot (accessed 02.01.2022)
Making the second pillar voluntary puts additional pressure on the first, PAYG pillar. The public pension fund is already running an annual deficit close to 2% of GDP and political promises to increase pensions extraordinary, beyond indexation could further undermine sustainability. Regardless of annual indexation, the average level of a public old-age pension is modest (€591 per month) and poverty among the elderly remains a concern.
Citations:
ERR (2021). https://www.err.ee/1608162478/teisest-sambast-lahkujad-votavad-valja-1-29-miljardit-eurot (accessed 02.01.2022)
Graph View
How effectively do policies support the integration of migrants into society?
10
9
9
Cultural, education and social policies effectively support the integration of migrants into society.
8
7
6
7
6
Cultural, education and social policies seek to integrate migrants into society, but have failed to do so effectively.
5
4
3
4
3
Cultural, education and social policies do not focus on integrating migrants into society.
2
1
1
Cultural, education and social policies segregate migrant communities from the majority society.
Since the Soviet period, Estonia has had a large non-native population. Russian speakers – ethnic Russians and other Slavs – compose almost a third of the population, 16% of whom are foreign born. The national immigration policy has been regularly updated and monitored, with the government allocating substantial national and EU funds to various integration programs. All government activities are framed by the national development plan Integrating Estonia 2020.
In national elections, only Estonian citizens can vote and register as candidates. Permanent residents without Estonian (or other EU) citizenship can vote in municipal elections but cannot stand as candidates. An increasing number of Russian-speakers who hold Estonian citizenship are employed in the civil service, belong to the political elite and stand as candidates in elections. However, the electoral turnout of Russian-speakers remains lower than the national average. Several public and private initiatives have sought to facilitate civil society activism among ethnic minorities, yielding some visible progress. The differences in the economic and social situation are decreasing, but people of other nationalities are more vulnerable in the labor market during recessions. Until now, Estonia has had an education system separated on the basis of language, but this has started to change. Increasingly, more ethnic minority children study in language immersion groups/classes in preschools and Estonian-language elementary schools. Plans to introduce a unitary, primarily Estonian-language-based school system have been mooted since the 1990s, but have faced resistance from the Russian-speaking community and practical obstacles (e.g., the poor language proficiency of teachers).
Beyond policies on integrating immigrants from the Soviet period, programs to integrate refugees and new immigrants. To help newly arrived immigrants settle in and acquire knowledge, skills and proficiency in the Estonian language, they can choose to participate in an introductory welcoming program. Additionally, the Ministry of the Interior supports and empowers public, private and third-sector organizations working on a day-to-day basis with newly arrived immigrants by building support networks and developing public services. According to survey data, 70% of new immigrants rate their adaptation in Estonia as very good or close to excellent, 32% of new immigrants interact with Estonians almost every day and 24% do so at least once a week (Praxis et al. 2021). The overall number of new immigrants has been modest and most of immigrants settle in English-speaking work environments in Tallinn, or arrive from Ukraine or Russia, which eases integration into the Russian-speaking sphere of society.
Citations:
Praxis et al. (2021). Estonian integration Monitoring 2020. Tallinn: Ministry of Culture. https://www.kul.ee/en/estonian-integration-monitoring-2020 (accessed 02.01.2021)
In national elections, only Estonian citizens can vote and register as candidates. Permanent residents without Estonian (or other EU) citizenship can vote in municipal elections but cannot stand as candidates. An increasing number of Russian-speakers who hold Estonian citizenship are employed in the civil service, belong to the political elite and stand as candidates in elections. However, the electoral turnout of Russian-speakers remains lower than the national average. Several public and private initiatives have sought to facilitate civil society activism among ethnic minorities, yielding some visible progress. The differences in the economic and social situation are decreasing, but people of other nationalities are more vulnerable in the labor market during recessions. Until now, Estonia has had an education system separated on the basis of language, but this has started to change. Increasingly, more ethnic minority children study in language immersion groups/classes in preschools and Estonian-language elementary schools. Plans to introduce a unitary, primarily Estonian-language-based school system have been mooted since the 1990s, but have faced resistance from the Russian-speaking community and practical obstacles (e.g., the poor language proficiency of teachers).
Beyond policies on integrating immigrants from the Soviet period, programs to integrate refugees and new immigrants. To help newly arrived immigrants settle in and acquire knowledge, skills and proficiency in the Estonian language, they can choose to participate in an introductory welcoming program. Additionally, the Ministry of the Interior supports and empowers public, private and third-sector organizations working on a day-to-day basis with newly arrived immigrants by building support networks and developing public services. According to survey data, 70% of new immigrants rate their adaptation in Estonia as very good or close to excellent, 32% of new immigrants interact with Estonians almost every day and 24% do so at least once a week (Praxis et al. 2021). The overall number of new immigrants has been modest and most of immigrants settle in English-speaking work environments in Tallinn, or arrive from Ukraine or Russia, which eases integration into the Russian-speaking sphere of society.
Citations:
Praxis et al. (2021). Estonian integration Monitoring 2020. Tallinn: Ministry of Culture. https://www.kul.ee/en/estonian-integration-monitoring-2020 (accessed 02.01.2021)
Graph View
How effectively does internal security policy protect citizens against security risks?
10
9
9
Internal security policy protects citizens against security risks very effectively.
8
7
6
7
6
Internal security policy protects citizens against security risks more or less effectively.
5
4
3
4
3
Internal security policy does not effectively protect citizens against security risks.
2
1
1
Internal security policy exacerbates the security risks.
Public safety has steadily increased and crime rates have declined over the preceding decade. Multiple factors have contributed to greater public safety. Alcohol consumption – a major cause of severe traffic accidents and violent behavior – has declined as a result of stricter alcohol policy and increased public awareness of healthy living. Increased funding for the police and the border guard has been another positive change, which has enabled better human and technological resourcing, and more efficient policing.
While alcohol consumption has decreased, drug-trafficking and cybercrimes are increasing challenges. Cyber threats are addressed mainly via awareness-raising activities, whereas placing greater emphasis on secure borders is particularly important in combating human and drug-trafficking. In 2020–2021, additional investment has been committed to improving the infrastructure of the Estonia’s eastern border (Siseministeerium 2021). Cooperation between tax authorities, border authorities and the police domestically and internationally with neighboring countries will be key to successfully tackling this challenge. The border guard and police force enjoy high levels of public trust (Turu-Uuringute AS 2021), which helps to address safety problems more efficiently as envisaged in the Internal Security Development Plan 2015 – 2020.
Citations:
Estonia Drug Report 2019. European Monitoring Centre for Drugs and Drug Addictions. http://www.emcdda.europa.eu/countries/drug-reports/2019/estonia_en (Accessed 14.10.2019)
Turu-Uuringute AS 2021. Eesti elanikkonna turvalisuse uuring. Tallinn: Politsei- ja Piirivalve Amet. https://www.politsei.ee/files/Anal%C3%BC%C3%BCs%20ja%20statistika/2021-ppa-elanikkonnauuring-raport.pdf?788f119e8f
Siseministeerium 2021. https://www.siseministeerium.ee/uudised/valitsus-toetas-siseminister-jaani-ambitsioonikamat-idapiiri-valjaehitamise-plaani
While alcohol consumption has decreased, drug-trafficking and cybercrimes are increasing challenges. Cyber threats are addressed mainly via awareness-raising activities, whereas placing greater emphasis on secure borders is particularly important in combating human and drug-trafficking. In 2020–2021, additional investment has been committed to improving the infrastructure of the Estonia’s eastern border (Siseministeerium 2021). Cooperation between tax authorities, border authorities and the police domestically and internationally with neighboring countries will be key to successfully tackling this challenge. The border guard and police force enjoy high levels of public trust (Turu-Uuringute AS 2021), which helps to address safety problems more efficiently as envisaged in the Internal Security Development Plan 2015 – 2020.
Citations:
Estonia Drug Report 2019. European Monitoring Centre for Drugs and Drug Addictions. http://www.emcdda.europa.eu/countries/drug-reports/2019/estonia_en (Accessed 14.10.2019)
Turu-Uuringute AS 2021. Eesti elanikkonna turvalisuse uuring. Tallinn: Politsei- ja Piirivalve Amet. https://www.politsei.ee/files/Anal%C3%BC%C3%BCs%20ja%20statistika/2021-ppa-elanikkonnauuring-raport.pdf?788f119e8f
Siseministeerium 2021. https://www.siseministeerium.ee/uudised/valitsus-toetas-siseminister-jaani-ambitsioonikamat-idapiiri-valjaehitamise-plaani
Graph View
To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in low- and middle-income countries?
10
9
9
The government actively and coherently engages in international efforts to promote equal socioeconomic opportunities in low- and middle-income countries. It frequently demonstrates initiative and responsibility, and acts as an agenda-setter.
8
7
6
7
6
The government actively engages in international efforts to promote equal socioeconomic opportunities in low- and middle-income countries. However, some of its measures or policies lack coherence.
5
4
3
4
3
The government shows limited engagement in international efforts to promote equal socioeconomic opportunities in low- and middle-income countries. Many of its measures or policies lack coherence.
2
1
1
The government does not contribute (and often undermines) efforts to promote equal socioeconomic opportunities in low- and middle-income countries.
Estonia actively participates in international humanitarian interventions through the European Union and United Nations. Estonia’s development cooperation policy is regulated by the Estonian Development Cooperation and Humanitarian Aid Program 2020–2023, which takes the United Nation’s Millennium Development Goals (MDGs) as a starting point. The strategy details Estonia’s development objectives, main fields of activity and identifies major partner countries. The priority partners are the former Soviet Republics – Georgia, Moldova, Belarus and Ukraine, as well as Afghanistan. Estonia is active across various fields, although special efforts have focused on transferring knowledge in education, healthcare and e-government. Estonia is a world leader in the dissemination of domestic expertise in implementing ICT in public administration and education. In 2020, Estonia helped alleviate the impact of the coronavirus in Ukraine, Georgia, Armenia, Montenegro, North Macedonia, Syria and the region, Venezuela, Sudan, Libya, Yemen, and Bangladesh.
The total amount of funds available for development assistance in 2019 amounted to €43.3 million, which is 0.16% of the gross national income. Two-thirds of it is devoted to multilateral cooperation and one-third to bilateral cooperation. The budget for humanitarian aid in 2020 amounts to around €3.5 million.
In parallel to government efforts, NGOs and private enterprises work in the field of international development. Awareness-raising campaigns in the fair-trade movement offer one example of NGO activity. Due to the country’s open economic policy and the absence of protectionist measures, fair-trade products can be found in most Estonian supermarkets.
Citations:
Ministry of Foreign Affairs (2019). Overview of Estonian Development Cooperation. https://vm.ee/sites/default/files/content-editors/development-cooperation/arengukoostoo_infolehed_uldine_0.pdf (accessed 03.01.2022)
The total amount of funds available for development assistance in 2019 amounted to €43.3 million, which is 0.16% of the gross national income. Two-thirds of it is devoted to multilateral cooperation and one-third to bilateral cooperation. The budget for humanitarian aid in 2020 amounts to around €3.5 million.
In parallel to government efforts, NGOs and private enterprises work in the field of international development. Awareness-raising campaigns in the fair-trade movement offer one example of NGO activity. Due to the country’s open economic policy and the absence of protectionist measures, fair-trade products can be found in most Estonian supermarkets.
Citations:
Ministry of Foreign Affairs (2019). Overview of Estonian Development Cooperation. https://vm.ee/sites/default/files/content-editors/development-cooperation/arengukoostoo_infolehed_uldine_0.pdf (accessed 03.01.2022)