Trends in labour market participation, income and job satisfaction among non-nationals

A recent study by the Institute of International and Social Studies reveals that, although the labour market status of non-nationals remains low in Estonia, young non-nationals are advancing to higher positions. The study also highlights that the socioeconomic conditions of Estonian-Russians are becoming more equal to those of ethnic Estonians. However, compared to Estonians, Russians are less satisfied with their job, regardless of the type of occupation. Their income is strongly determined by their citizenship.

In 2005, the Institute of International and Social Studies (IISS) at the University of Tallinn and the social and market research company Saar Poll carried out a study entitled Monitoring integration (in Estonian, 687Kb PDF). The data were collected in Estonia at the beginning of 2005. In addition to the main sample of 1,000 individuals aged between 15 and 74 years, an extra sample consisted of 200 Russians – aged between 15 and 29 years – living in Estonia.

Labour market participation

The position of Estonians in the labour market has been better than the status of non-nationals in the last 15 years. Although there are no remarkable differences in the rate of employment and participation, the unemployment rate of non-Estonians is much higher (see Figure 1). Youth unemployment, namely in the 15–24 age group, among non-nationals is significantly higher (at 29.4%, compared with 9.5% for Estonians).

Figure 1: Participation, employment and unemployment rates of Estonians and non-Estonians, 15–64 age group, 1997 and 2005

Source: Statistics Estonia

Ida-Virumaa, a mainly Russian-speaking region in the northeast of Estonia, reports the highest unemployment rate in the country; however, the study attributes the reasons for this rate more to the sluggish economic development in the region than to the personal qualities and employability of its inhabitants. Non-Estonians in other regions are coming closer to the level of Estonians in terms of labour market participation.

The study reveals that occupational segregation by nationality is weakening. The trend for the Russian-speaking minority has mainly been employment in unskilled jobs. However, since 2000, increased numbers of non-Estonians are participating in higher education, and more non-Estonians are employed as skilled workers and professionals. Moreover, non-nationals are expanding into sectors where they would not have had a presence before, such as real estate and financial services. These trends are stronger among the younger generations.

Income levels

Almost half of Estonian-Russians earn an income higher than EEK 2,500 (€160) per month. The income of Estonian-Russians is still lower than that of Estonians, but the wage gap has narrowed in recent years. The income of Russians in Estonia is strongly determined by their citizenship (see Table). Estonian-Russians with Estonian citizenship earn more than ethnic Estonians whereas Estonian-Russians with Russian citizenship earn significantly less: 55% of the latter earn less than EEK 2,500 per month. Those with undetermined citizenship (ethnic Russians who were formerly citizens of the Soviet Union) also earn significantly less than ethnic Estonians: 46% of the former earn less than EEK 2,500 per month.

Source: Monitoring integration (in Estonian, 687Kb PDF), IISS, 2005

Russians with Estonian citizenship are younger and more educated than other groups of Russians, which explains the fact that there are fewer Russians with Estonian citizenship than ethnic Estonians in low income groups. It is difficult to find a well paid job without a good knowledge of the Estonian language. Some 71% of Russians with Estonian citizenship and 5% with Russian citizenship have advanced Estonian language skills.

Job satisfaction

The level of job satisfaction among the Russian-speaking population has improved in the last five years but it is still lower than that of Estonians. A total of 22% of Estonians and 35% of Russian-speaking people are not satisfied with their jobs. The job satisfaction of Russians is lower in all occupations, but especially in the services sector where mainly women are employed. Russian-speaking women are considerably less satisfied with their jobs than Estonian women or than non-Estonian men. There is no significant gender difference in job satisfaction among Estonians.

Figure 2: Dissatisfaction with job, by sector, % of employees, 2005

Note: The number of Russian-speaking employees in the agriculture and fisheries sector is too small to be included.

Source: Non-Estonians’ Integration Foundation, 2005

Young people aged under 30 years are less satisfied in all ethnic groups. Only one quarter of Russian-speaking young people in unskilled occupations are satisfied with their job, compared with two thirds of Estonians. At the same time, only 14% of young Estonian professionals and 13% of Russian-speaking young specialists are not satisfied with their jobs. A strong correlation exists: the higher the education level, the higher the job satisfaction. Education level is a more important factor in relation to job satisfaction among Estonians than non-Estonians.

Commentary

Approximately 68% of people living in Estonia are of Estonian nationality, according to Statistics Estonia (Statistikaamet). The largest ethnic minority in Estonia comprises Russians, who make up 26% of the population (346,000 people in 2005, representing 81% of all non-Estonians). According to the census in 2000, 80% of the population held Estonian citizenship, 6% were Russian citizens and 12% had undetermined citizenship (‘aliens passport’).

Marre Karu and Liis Roosaar, Praxis Centre for Policy Studies