Estonia’s gender pay gap has increased by 2.8 percentage points year-on-year in 2022, with female employees earning 17.7% less than male employees. Meanwhile in 2022, 48,000 people in the Baltic nation lived in absolute poverty, up from 18,000 in 2021, and 303,900 people lived in relative poverty – nearly 3,000 more than in 2021.
The largest gender pay gap was found in financial and insurance activities (32.9%), followed by wholesale and retail trade (31.6%), other service activities (27.8%) and manufacturing (25.8%). Transportation and storage were the only economic activity where women earned more than men, with women’s gross hourly earnings exceeding men’s by 9.3%. The gender pay gap narrowed by 9.9 percentage points from 2013 to 2021 but widened by 2.8 percentage points in 2022. The gap is calculated as the difference between the average gross hourly earnings of male and female employees, divided by the average gross hourly earnings of male employees. Estonia has one of the highest gender pay gaps in the EU.
Estonia’s social protection system has not effectively dealt with the country’s first place ranking in Europe. The elderly and single mothers face the greatest risks. Absolute poverty is defined as the minimum threshold for living, while relative poverty is defined as 60% of the median income. Although absolute poverty has decreased, relative poverty rates have increased, reaching almost a quarter of the total population. Regional disparities exist, with poverty rates nearly twice as high in South-Eastern and Eastern Estonia than in Tallinn. Single parents face the greatest risk of poverty, while families with two or more children face the same risk. Estonia’s social transfers, or benefits and pensions, are nearly twice as effective in reducing relative poverty rates as Finland, Norway, and Ireland.