Estonia

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    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 almost 80%.

    The labour market has benefitted from this economic expansion and has performed well. Unemployment has declined since 2010 and is currently among the lowest in the EU (5% in 2018). The employment rate (78%) is very high and exceeds the EU 2020 target.  Continue reading