The COVID-19 pandemic had a profound impact on countries worldwide, with Estonia being no exception. The country, like many others, experienced a range of harsh effects stemming from the pandemic, including a significant rise in poverty rates. COVID-19’s impact on poverty in Estonia involved economic issues such as labor shortages and increasing inflation rates.

Poverty Before and After COVID-19

In 2018, before the pandemic, Estonia’s poverty rate was at its lowest, with only 20% of the country’s population living in poverty. When the pandemic hit in 2019, this number rose to about 60%.

Although Estonia initially had a strong COVID-19 rebound, it eventually encountered a quick and rapid decline in monetary aspects. It experienced a decline in the labor market, which contributed to an increase in poverty. The labor shortage issues have been causing steady price inflation since 2021.

Approximately 75% of Estonians aged 65 or older live in relative poverty, while the poverty rate for women has surged by around 10%. In 2021, 22.8% of Estonians were at risk of poverty. And the number of individuals who were already living in poverty escalated by approximately 2.2% after 2020.

The absolute poverty rate in Estonia is up to 5% as of 2021. The majority of those in absolute poverty are between the age range of 18 to 24 years old.

The heightened poverty rates in Estonia stem directly from the rise in unemployment rates. In 2020, job availability declined, causing many Estonians to lose their employment. Furthermore, certain industries, including social affairs, health care and education, faced difficulty in hiring qualified personnel to fill open positions.

Recovery Efforts

One positive aspect of Estonia’s situation is its existing digital infrastructure, which allowed the country to adapt more seamlessly to the rapid shift toward technology during the COVID-19 pandemic. The country’s advanced technological landscape has facilitated significant improvements in the areas of health and education.

By virtue of digital advancements, Estonia’s public services were able to continue operating without significant disruption during the pandemic. The country launched its e-Cabinet initiative in 2000, transitioning decision-making processes from paper-based documents to digital systems. This initiative was further strengthened in 2020, with minimal negative effects on Estonians, who were already familiar with these technological innovations.

Additionally, Estonia improved its healthcare system by utilizing its expertise in technological innovations. The country developed apps like the ViVeo Health app, which allowed Estonians to connect with health care professionals through video calls.

Measures that Aided Estonians During COVID-19

Between March 2020 and December 2021, the European Commission approved millions of euros on multiple occasions toward schemes that aim to help Estonia recover from the impact of the pandemic.

In addition to the European Commission’s donations, the Estonian government authorized a budget support package that was applied across several agencies and sectors. This support budget resulted in a 9% boost to the gross domestic product from 2018.

Estonia also preordered vaccines from various suppliers to ensure securing enough for its entire population.

Looking Ahead

Overall, COVID-19’s impact on poverty in Estonia has been far-reaching. COVID-19 caused an increase in unemployment and a decrease in job availability, ultimately leading to a rise in poverty rates. However, despite these negative impacts, Estonia continues to make progress in recovering from COVID-19. The country is benefitting from aid from the European Commission, improved fiscal support systems and strong digital advancements.

– Merlis Burgos-Ramos
Photo: Flickr