DEFINITIONS

Absolute poverty gap – the distance of mean income of people in absolute poverty from the absolute poverty threshold in percentages.

Absolute poverty rate – share of persons with an equalised yearly disposable income lower than the absoluute poverty threshold.

Absolute poverty rate before social transfers – the absolute poverty rate when social benefits paid by the state and local governments are not counted in the household's income. It can be calculated in two ways: either by counting pensions as social transfers and excluding them from the household's income or, by including them in the household's income like salaries.

Absolute poverty threshold – since 2004 the estimated subsistence minimum. In 1997–2003 the absolute poverty threshold is established based on the household consumption data and considering the minimum human needs by the working group of the University of Tartu.

Adult – a household member aged 18 or older (as at 1 January of the reference year) who is not a dependent child.

Adult and child(ren) – household consisting of one adult and at least one dependent child.

At-risk-of-poverty rate – share of persons with an equalised yearly disposable income lower than the at-risk-of-poverty threshold.

At-risk-of-poverty rate anchored in time – share of persons with an equalised yearly disposable income lower than the at-risk-of-poverty threshold from three years ago adjusted for inflation.

At-risk-of-poverty rate before social transfers – the at-risk-of-poverty rate when social benefits paid by the state and local governments are not counted in the household's income. It can be calculated in two ways: either by counting pensions as social transfers and excluding them from the household's income or, by including them in the household's income like salaries.

At-risk-of-poverty threshold – 60% of the median equalised yearly disposable income of household members.

Below upper secondary education – less than primary education, primary education, basic education, vocational education for youngsters without basic education.

Couple aged 64 and less without children – household consisting of two members, both aged 64 or less.

Couple without children, at least one partner is aged over 64 – household consisting of two adults, at least one of them aged 65 or over.

Couple with one child – household consisting of two adults and one dependent child.

Couple with three or more children – household consisting of two adults and at least three dependent children.

Couple with two children – household consisting of two adults and two dependent children.

Dependent child – a household member aged 0–17 (as at 1 January of the reference year) or a household member aged 18–24 who is economically inactive and living with at least one parent.

Disposable (net) income – a sum of income from wage labour, benefits and losses from self-employment, property income, social transfers, regular inter-household cash transfers received and receipts for tax adjustment of which inter-household cash transfers paid, taxes on wealth and repayments for tax adjustment have been subtracted.

Equalised income – total household income, which is divided by a sum of equivalence scales of all household members.

Equivalence scale – a weight designated to a household member depending on his/her age to reflect the joint consumption of a household.

Estimated subsistence minimum – the minimum amount of living resources, which covers the general daily needs of person. The subsistence minimum consists of minimum estimated food basket (excl. expenditure on alcoholic beverages and tobacco products) and individual non-food expenditures (incl. expenditure on dwelling).

Gini coefficient – the relationship of cumulative shares of the population arranged according to the level of equalised disposable income to the cumulative share of the equalised total disposable income received by them. The value of Gini coefficient varies from 0 to 1. The closer the value to 0 is, the more equally the income is distributed in a country; the closer the value gets to 1, the more unequally the income is distributed.

Highest quintile – fifth of the population receiving the highest equalised disposable income.

Household – a group of persons living in the common main dwelling (at the same address), who share joint financial and/or food resources and whose members consider themselves to belong to the same household. Household can also consist of one member only.

Household with children – household where there is at least one dependent child.

Household without children – household where there are no dependent children.

Labour status – labour status, which characterised a persons for more than 6 months in a year.

Long-term unemployment rate – the share of people who have been unemployed for a year or longer of total labour force.

Lowest quintile – fifth of the population receiving the lowest equalised disposable income.

Material deprivation rate – the share of persons, who cannot afford at least 3 items of the 9: 1) to pay rent or utility bills, 2) keep home adequately warm, 3) face unexpected expenses, 4) eat meat, fish or a protein equivalent every second day, 5) a week holiday away from home, 6) a car, 7) a washing machine, 8) a colour TV or 9) a telephone.

Minimum estimated food basket – food products to ensure the general daily need of nutrients, vitamins and minerals per capita without causing health problems. The diurnal energy value of the minimum estimated food basket is 2,400 kcal.

Quintile share ratio – the sum of equalised yearly disposable income of the highest quintile divided by the sum of equalised yearly disposable income of the lowest quintile.

Relative median at-risk-of-poverty gap – the distance of mean income of people at-risk-of-poverty from the at-risk-of-poverty threshold in percentages.

Severe material deprivation rate – the share of persons, who cannot afford at least 4 items of the 9: 1) to pay rent or utility bills, 2) keep home adequately warm, 3) face unexpected expenses, 4) eat meat, fish or a protein equivalent every second day, 5) a week holiday away from home, 6) a car, 7) a washing machine, 8) a colour TV or 9) a telephone.

Single person aged over 64 – household consisting of one person aged 65 or more.

Single person aged under 65 – household consisting of one person aged 64 or less.

Tertiary education – professional secondary education based on secondary education, higher education, Master`s and Doctor`s degree.

Transfers – payments made by collectively organised schemes, government or local authorities with the intension to relieve the households or persons from the financial burden of a number of risks.

Upper secondary education – vocational training based on based education, general secondary education, vocational secondary education based on basic education, professional secondary education based on basic education, vocational secondary education based on secondary education.

Very long-term unemployment rate – the share of people who have been unemployed for two years or longer of total labour force.

Work intensity in a household – the total number of months spent by working age household members (aged 59 and under) in employment or self-employment during income reference period relative to the maximum number of months the household members could have spent in employment or self-employment. The indicator ranges from zero (no working age member worked) to one (all working age members worked throughout the income reference period). Dependent children are not counted as working age household members.

METHODOLOGY

Poverty, inequality and material deprivation indicators for 2004 and onwards as well as the share of population with low levels of education and health status by income starting from 2003 are calculated on the bases of the Estonian Social Survey (ESS). Poverty and inequality measures for 1997–2003 are drawn from the Household Budget Survey (HBS). From 2012 onwards the disposable income related to poverty and inequality indicators is in addition to the Estonian Social Survey partially from registry data (Tax and Customs Board, Unemployment Insurance Fund, Health Insurance Fund, Social Insurance Board). Unemployment indicators as well as the share of early school leavers are calculated on the basis of the Labour Force Survey (LFS).

In the case of indicators relating to poverty and inequality it is important to keep in mind that the figures for 1997–2003 are calculated on the bases of the Household Budget Survey (HBS), whereas the indicators for 2004 and onwards are drawn from the Estonian Social Survey (ESS). The latter is conducted in all EU countries following the same methodological principles with the aim of collecting comparable data on income and living conditions across the EU. The two data sources – the HBS and the ESS have several substantial methodological differences, which can lead to changes in indicators 2004 and later compared to previous years. Change in data sources in 2012 should be taken into account when comparing data for 2004–2011 with the following years, when income data comes partially from registres. The user of statistical data has therefore keep in mind that the discontinuities that may occur are methodological in nature and do not necessarily reflect underlying social changes.

MORE DATA

Eesti statistika aastaraamat. Statistical Yearbook of Estonia
Eesti sotsiaaluuring. Metoodikakogumik. The Estonian Social Survey. Methodological Report
Eesti Statistika Kvartalikiri. 1/13. Quarterly Bulletin of Statistics Estonia

OTHER INFORMATION

In the Eurostat public use database, at-risk-of-poverty rate and indicators of inequality have been published under one year greater than here, as Eurostat uses the survey year and Statistics Estonia an income year.

CONTACT PERSON

Tiiu-Liisa Rummo
Methodology and Analysis Department
Tel +372 625 8425
tiiu-liisa.rummo@stat.ee

Updated: 13.05.2015