Labour market

Employment
64% of the Estonian labour force is occupied in various branches of the services sector, approximately 32% is occupied in industry and the remaining 4% deal with agriculture, fisheries and forestry. Agriculture offers work for about 3% of the labour force, which is one of the smallest percentages in Europe, especially when compared to other transition economies. In the processing industries, 20% are engaged in light industry and 24% in the timber and paper industry; approximately 11% are occupied in food industry, 12% in metal industry, and more than 17% of the workforce in various engineering branches. 9% of workers are employed in the construction sector.

Approximately 91% of the Estonian workforce are employed workers, the percentage of self-employed persons is about 5% and the number of private entrepreneurs with salaried empolyees is 23.5 thousand, which makes over 4% of the employed population.

Approximately 44% 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 more than 28%, more than 89% of the workforce have secondary education.

Unlike in many other countries Estonia has a high level of employment among women — they constitute 50.4% of the workforce, there is less unemployment among them, and of the women of working age 55% are employed.

Unemployment
An inevitable by-product of the economic reforms in the early 90s 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. During the period of fast growth, unemployment fell to 4% and this caused a severe lack of manpower. That’s why salaries started growing very quickly. As a result of the economic crisis, unemployment reached almost 20% in the winter of 2009-2010 and salaries decreased (the average salary fell more than 5%).

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. During the crisis, unemployment among men substantially exceeded unemployment among women, because there was a greater effect on fields where there were more males occupied (e.g. construction).

​After Estonia joined the European Union in 2004, an increasing number of people started to work abroad, especially in Finland, because the salaries were higher, the language was very similar and Finland is located very near Estonia. Most Estonians working in Finland still live in Estonia, visiting home on weekends or perhaps less often; many have only seasonal or temporary work in Finland. During the period of quick growth in the Estonian economy, the number of people working abroad started to decline, but since the end of the crisis it has increased again. This is partly a result of high unemployment in Estonia. Many Estonians work abroad as construction workers, bus drivers and chauffeurs, as well as salespersons and service workers. It’s a major problem that medical workers and many other educated specialists are leaving Estonia.

​During the economic crisis, less qualified people suffered higher unemployment, although the number of jobs for specialists kept on growing. As great changes have occurred in the economy and production, workers need to improve their skills or acquire new skills. Unfortunately, there are still a lot of shortcomings when it comes to vocational education and retraining. Also, there are people who don’t want to change professions or return to school; often there aren't real opportunities to study or the opportunities are too expensive for the unemployed. The government has changed some regulations and increased financing to train the unemployed, but it hasn't done enough. It's also true that workers lack the desire and/or skills to work. This was especially clear during the period of fast economic growth.

Salaries and other income
The average monthly net salary in Estonia is about 806 euros and the avarage wage per hour is 4.85 euros, 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 68%), the next position among the sources of income is occupied by pensions (18%) and various benefits (6%). Individual work (especially agriculture) provides 4% of the income. The average old age pension in Estionia 305.1 euros, which is 48% of the average net salary.

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