No. 10




Ensuring Sustainability in Estonian Policy toward the Elderly

15 December 2004


RiTo No. 10, 2004

  • Janno Reiljan

    Professor of Economics, University of Tartu

  • Liina Kulu

    University of Tartu macroeconomic studies chair doctoral program, University of Tartu European College scholar

An analysis of Estonian elderly policy from the standpoint of sustainability shows that the Estonian pension system is not socially or financially sustainable, since it does not ensure pensioner well-being.

The level of social protection expenditure is lower than the level of economic development would require, and both pension expenditure as a whole and expenditure on old age pensions have fallen in the last years of economic growth. Despite that, a major share of pension fund revenue is earmarked for reserve, the necessity of which has not been justified. Since the pension level already now is hovering at the minimum level set by the European social security code, Estonia’s pensioner policy enters into conflict with the obligations taken in ratifying the code. Yet pensioners’ problems in Estonian society are not related only to low purchasing power; they are more complicated. Considering the low priority given to the social sphere compared to economic growth, more attention should be paid to the treatment of social policy as productive factor, not as resource drain, the former being the foundation of modernization of the European social model.

Full article in Estonian