Estonia

  • © AFP/Europress

    About the ILO in Estonia


    Economic expansion restricted by shrinking working age population


    After independence in 1991, Estonia quickly introduced comprehensive economic reforms transiting to market based economy. A strong political consensus helped to go for fast and substantial reforms building an open economy based on foreign trade and foreign direct investment. EU membership in 2004 and the integration with the European Union further enhanced the successful transition.

    As a result, Estonia has been able to maintain an impressive rate of convergence towards the average EU per capita income in the past 20 years. While in the early 1990s the per capita income was 30% of the EU average it now reached more than 80%.
    The labour market has benefitted from the economic expansion and performed well. In 2019, the employment rate is estimated at 80 per cent, exceeding the EU 2020 target.  The gender employment gap decreased to 8 percentage points from 13 percent in 2017.

    Meanwhile, the unemployment rate fell to 4,4 per cent, signalling labour shortages in the country.  Continue reading