Labour market

Employment
About 59% of the Estonian labour force is occupied in various branches of the services sector, approximately 35% is occupied in industry and the remaining 6% deal with agriculture, fisheries and forestry. Agriculture offers work for about 4% of the labour force, which is one of the smallest percentages in Europe, especially when compared to other transition economies. In the processing industries, 18% are engaged in light industry and more than one fifth in the timber and paper industry; approximately 15% are occupied in food industry, 10% in metal industry, and more than 17% of the workforce in various engineering branches.

Approximately 90% of the Estonian workforce are employed workers, the percentage of self-employed persons is about 6% and the number of private entrepreneurs with salaried empolyees is 18.3 thousand, which makes over 3% of the employed population.

Approximately 43% of Estonia's workforce have found a job in Tallinn or nearby (one third in Tallinn). The percentage of employees with at least one higher education among the employed population is almost 23%, 67% of the workforce have secondary education.

Unlike in many other countries Estonia has a high level of employment among women — they constitute almost one half of the workforce, there is less unemployment among them, and of the women of working age 53% are employed.

Unemployment
An inevitable by-product of the economic reforms was the closure of many enterprises and staff cuts in others. Although at the same time new jobs were created and the Estonian population decreased, the number of the unemployed grew. The period after Russia's crisis in 1998 proved especially severe as the changes reached numerous agricultural and food processing enterprises which had continued their inefficient operation till then. In 2000 unemplyed reached 12.5% but then started to decrease quite swiftly. Today, unemployment in estonia is less than 8% and no changes are expected there in near future.

Like everywhere in the world, young people have problems finding a job in Estonia. A particular problem in Estonia is the language; insufficient knowledge of Estonian results in a higher level of unemployment among the Russian population and in the North-Eastern Estonia. During recent years job-seekers have gradually moved to towns with more opportunities, and thus unemployment has increased in towns as well (including Tallinn) and has gone down in the rural areas. A notable proportion of the employed people of small towns and villages — construction workers, road workers and foresty workers — work in places far from their homes. Unemployment among men which was much higher before has now diminished, because the quicky developing construction industry and road building business offer a lot of jobs to former farmers and land improvement specialists.

There are several reasons for the unemployment but many of them are related to the shortcomings of the vocational education system. Many older people lack necessary new skills, there are people unwilling to switch to another area or to undergo training, the trainig possibilities are often missing altogether or are too expensive for an unemployed person. Relocation is often a problem (there are huge differences in estate prices in Estonia). It has to be admitted that in many cases the employees themselves lack the skills and willingness to work.

Therefore in Estonia the fairly high level of unemployment is accompanied by the lack of qualified workforce — the reason why about 20% of the entrepreneurs are unable to expand their production. It may also be the case that in many instances the offered salary does not inspire the possible workers.

Salaries and other income
The average monthly net salary in Estonia is about 456 euro, which is undoubtedly very little compared to the developed countries. At the same time the salary rise in Estonia has been really quick — in 1992 the average monthly salary in Estonia was just 35 euro. Despite the rapid rise in the nominal value of salaries the formely very quick inflation meant that the real salary rise was much more moderate.

Salary is the most important source of income for Estonian families (ca 65%), the next position among the sources of income is occupied by pensions (19%) and various benefits (7%). Individual work (especially agriculture) provides 4.5% of the income, for an average family proceeds from other forms of entrepreneurship provide ca 0,5% of the overall income. The average old age pension in Estionia is 2302 EEK (147 euro), which is approximately 41% of the average net salary.

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