According to Statistics Estonia, 22.5% of Estonia’s population lived at risk of poverty and 3.5% in absolute poverty in 2022; the number of people who lived in absolute poverty grew by two and a half times, compared with 2021.
In 2022, compared with 2021, the share of people living at risk of poverty decreased by 0.3 percentage points and the share of people living in absolute poverty increased by 2.1 percentage points, according to Statistics Estonia, the country’s official statistics agency.
Epp Remmelg, a leading analyst at the agency, said the at-risk-of-poverty rate reflects income inequality in a country.
“Close to 303,900 people lived at risk of poverty in 2022, which is nearly 3,000 people more than in 2021. Their net monthly income, taking into account household composition, was less than €756,” she said.
Over the years, the at-risk-of-poverty rate has been highest among the elderly living alone. “In 2022, however, the at-risk-of-poverty rate increased the most among families with children, particularly those with three or more children. This is up by 4.6 percentage points from 2021,” she noted, adding that of people aged 65 and over living alone, 79.1% were at risk of poverty, down by 2.6 percentage points from the year before.
Altogether, 34.8% of single parents and 18.6% of families with three or more children were at risk of poverty. Remmelg asserted that the increase in income in 2022 was smaller than in the previous year and the at-risk-of-poverty rate rose mainly in those types of households to which the most pension pillar payments were made in the previous period.
One in ten young people in absolute poverty
Absolute poverty indicates the share of the population who are not able to meet their basic needs.
“In 2022, nearly 48,000 people lived in absolute poverty, whereas 18,000 people did so in 2021, which means the number has risen by two and a half times. Their net monthly income, taking into account household composition, was less than €303,” Remmelg said.
“The rise in the number of people living in absolute poverty is due to the large price increase in 2022, which raised the subsistence minimum more than ever before: by 30%, from €234 to €303. However, incomes, including different types of benefits, did not increase to the same extent in 2022.”
The absolute poverty rate rose the most among the inactive, and slightly less among the employed. In 2022, more than one in five unemployed people lived in absolute poverty. For the first time in a long time, retired people also fell into absolute poverty, as the national pension of €275 euros in 2022 was lower than the subsistence minimum.
“By age group, the absolute poverty rate in 2022 again increased the most among 18-24-year-olds. This means that one in ten young people lived in absolute poverty last year. More than one in ten lone parent households also lived in absolute poverty,” Remmelg added.
The revelation that one in ten young people lived in absolute poverty last year is particularly distressing, emphasizing the urgency of addressing economic disparities and creating opportunities for the younger generation. The correlation between the increase in absolute poverty and the significant price hike in 2022 highlights the complexity of economic dynamics and the need for comprehensive solutions.