1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Reducing Poverty in Estonia Through Activation and Better Targeting

The crisis revealed the need for a strategic review of the existing social protection system in Estonia. Extreme income fluctuations on one side and low social benefits on the other side exposed fragile groups in the population to a significant poverty risk. The government has recently commissioned several studies to prepare a systematic reform of the system. The spectrum of options is wide and includes increased generosity, further efficiency gains, strengthening incentives, better access to services and more ambitious activation. In particular, all support programmes should be designed to maximise the prospects of re-integrating beneficiaries into employment. Social benefit recipients should therefore become regular clients of the unemployment insurance offices, and they should benefit from job search assistance and active labour market policies. Scarce resources should be more targeted to those in greatest need. Addressing the large inflows into the disability system is a priority.

English

Keywords: well-being, Estonia, volatility, inequality, poverty, active labour market policies, disability, social policy, parental benefits, taxation, healthcare, flexibility
JEL: J13: Labor and Demographic Economics / Demographic Economics / Fertility; Family Planning; Child Care; Children; Youth; I18: Health, Education, and Welfare / Health / Health: Government Policy; Regulation; Public Health; I38: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs; E32: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Business Fluctuations; Cycles; J21: Labor and Demographic Economics / Demand and Supply of Labor / Labor Force and Employment, Size, and Structure; J65: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Unemployment Insurance; Severance Pay; Plant Closings
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