Giving people better opportunities to participate in the labour market is a key policy objective in all OECD and EU countries. More and better employment increases disposable income, strengthens economic growth and improves well-being. Well-tailored labour market and social protection policies are a key factor in promoting the creation of high quality jobs and increasing activity rates. Such policies need to address pressing structural challenges, such as rapid population ageing and evolving skill needs, including those needed for the green transition. They should also foster social inclusion and mobilise all of society.

The COVID-19 pandemic has increased the need for policies to support employment and inclusive labour markets. Even before the crisis, employment rates differed markedly across population groups. High unemployment, weak labour market attachment of some population groups and unstable or poor-quality employment reflect a range of barriers to working or moving up the jobs ladder. The economic repercussions of the pandemic risk entrenching these barriers further. It will be a major challenge for policy makers in the coming years to lift these labour market obstacles, support labour relocation and make labour market participation accessible for all.

Therefore, the OECD Employment, Labour and Social Affairs Committee is carrying out a set of reviews of labour market and social protection policies to encourage labour market participation and better employment among all population groups with a special focus on the most disadvantaged who face the greatest barriers to finding quality jobs. This includes a series of country studies, Connecting People with Jobs, which provide an assessment of how well active labour market policies (ALMPs) help all groups to move into productive and rewarding jobs and a number of policy recommendations that could improve the situation.

This report on Estonia is the seventh country study published in this series, this time undertaken in the framework of a broader technical support project that the European Commission and the OECD have provided to Estonia between 2019-21, funded by the European Union’s Structural Reform Support Programme. It discusses the set-up and performance of active labour market policies in Estonia. In particular, the report analyses the institutional and regulatory framework of ALMP provision, assesses the need for ALMPs in the Estonian population and evaluates whether ALMPs reach the people they are targeted to.

The present publication presents time series which extend beyond the date of the United Kingdom’s withdrawal from the European Union on 1 February 2020. In order to maintain consistency over time, the “European Union” aggregate presented here excludes the United Kingdom for the entire time series.

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