| Abstract: This report examines the impact of Estonia ' s political transition on its living standards, assesses the potential for continuing improvement in standards under the ongoing economic recovery, and makes recommendations to bridge the remaining poverty gap. There are two principal findings. First, households with the highest incidence of poverty are those with unemployed members. Second, the continuation of the ongoing recovery has the potential to reduce poverty substantially. The Estonian authorities now face the challenge of building on the strength of the economic recovery, refining the reform program to attain growth with equity. This entails ensuring that economic growth generates rising real incomes among a broad segment of the population, resolving emerging weaknesses in the social safety net, and increasing over time the overall resource envelope for social programs. To achieve these objectives, this report presents a two-pronged poverty reduction strategy: (1) to continue to foster growth with sound economic policies and (2) to strengthen the social safety net. |
