Active Policies of Employment in Estonia. Project: Handicapped People Employed In Co-operatives (HAPECO) Merit Trei, Project Manager Managing Director, NGO Eurohouse October 26th, 2006 Bordeaux

Estonia Today: Towards a Social Balance Estonian social policy is characterised by a steady movement towards a socially balanced society. 3 principal factors determine Estonia’s present social policy. Two of these can be found in every developed country: An ageing population A certain level of unemployment. The third is the inheritance left us by the Soviet Union – a socialist planned economy that lasted for 50 years.

Until the early 1990s, unemployment was largely an unknown phenomenon in Estonia. In the Soviet Union, every citizen had the duty to work. The state backed up its planned economy with coercive measures. The number of people working in any enterprise was unnaturally high. Labour market

After regaining independence in 1991 During the 1990s, the labour market underwent fundamental changes. There was a significant drop in the number of people employed in agriculture and industry, and a rise in employment in service industries. By the year 2000, unemployment had peaked at 13.6 per cent, which meant that people were out of work.

Registered unemployed persons,

Decrease of unemployment Since 2000, unemployment has decreased. In the 3rd quarter of 2003, the unemployment rate was 9.5% ( unemployed). At the beginning of 2006, the unemployment rate was 2.6%. On October 2006, 1,5 % of the people of working age (16 – 65) were unemployed. Unemployment is a largely structural problem: a mismatch between the skills and knowledge of workers and the requirements of the economy. In some fields, the unemployment rate differs more than twofold – employees with the required skills and the jobs available are often in different regions.

Harjumaa Lääne- Virumaa 1,3 - 2,7 % 2,8 - 4,1 % 4,2 - 5,5 % 5,6 - 6,9 % Ida-Virumaa Jõgevamaa RaplamaaJärvamaaLäänemaaHiiumaa Saaremaa Pärnumaa ViljandimaaTartumaa Põlvamaa Valgamaa Võrumaa Regional differences in unemployment, 2006 Finland, Sweden, etc Russia

Problems on Estonian labour market  High youth unemployment rate – 21,7%  High and growing share of the long-term unemployed – at ,4% of unemployed, at 2004 – 52,7 %  Structural unemployment (both on occupational basis and regional basis)  GROWING & SERIOUS PROBLEM: Lack of work force and skills * Figures are given for 2005

Priorities for reducing the level of unemployment The priorities for reducing the level of unemployment are as follows:  to increase investment in labour market training,  to raise employment levels among vulnerable groups such as young people, the long-term unemployed, and disabled people, along with fostering entrepreneurship and job- creation. In 2002, unemployment insurance was introduced, which is linked to previous earnings.

Legislation From the 1st of October 2000 two legal acts regulate the area:  Social Protection of the Unemployed Act  Labour Market Services Act From 1st of January 2002 came into force Unemployment Insurance Act – unemployment insurance premiums are paid since 1st of January 2003 From 1st of January 2006 new unified law: Labour market Services and Benefit Act *

Estonian labour market organizations Ministry of Social Affairs Deputy Secretary General on Labour Policy Labour Market Board Labour Inspectorate Labour Market Department Working Life Development Department Labour Policy Information and Analysis Department 16 Public Employment Offices (local)

Labour Market Board  organizes the activity of the employment offices: social protection of the unemployed and provision of employment services, granting of consent to aliens applying for work permits, sales of employment record books at the employment offices;  processes and analyses the database of job seekers and of the employment services supplied;  fulfils the obligations arising from international agreements and international legislation;  organizes cooperation between state agencies, local governments, federations of employees and employers for the purpose of resolving employment problems and ensuring social protection of the unemployed.

Regional Departments  register job seekers, including the unemployed;  provide employment services to employers and job seekers;  pay benefits to the unemployed (unemployment allowance, scholarships);  communicate information and gather information about vacant positions;  keep records of unemployed persons, job seekers and receivers of employment services;  decide granting of consent to aliens for work permits;  participate in the development of the labour market policy and programs and organize their implementation.

Active labour market measures  Information about labour market situation and opportunities for labour market training  Labour exchange  Labour market training  Employment subsidy to start a business  Employment subsidy to employers  Community placement  Vocational guidance  Jobpractice  Jobexercise  4 measures for disabled persons

INDIVIDUAL ACTION PLAN  Is an individual strategy to provide necessary services for the unemployed person  Is an outcome of LMB and the unemployed persons collaboration  Necessary for the unemployed person to agree and fulfill

LABOUR EXCHANGE  For job-seeker and unemployed person– suggesting suitable vacancies  For employer Advertising vacancies Making pre-selection of candidates by testing and interviewing  SUITABLE WORK cannot be counter-indicative for health; for travelling no more than 2 hours per day and 10% of the wage.  First 20 weeks: wage has to be at least 2 minimumwages and not less than 60% of the previous salary  After 20 weeks: wage has to be at least 1 minimumwage and not less than the unemployment allowance received at the time

LABOUR MARKET TRAINING  Maximum length – 1 year  Three types: primary or retraining – new profession skill conversion – improvement of skills adaptation training – activation, support and counseling  Training at least 40 hours – right to receive scholarship (38,5€)  Travel or accommodation subsidy ( up to 77€)

JOB PRACTICE  For unemployed persons who have the necessary education, but no working experience.  Job practice lasts up to 4 months and during that time a participant will receive scholarship  Participant will receive scholarship and has a right for travel or accommodation subsidy

EMPLOYMENT SUBSIDY TO START BUSINESS  Subsidy for unemployed person  Maximum sum of money is 1282 €  Required previous business experience or training in the field of business  Follow-up control during one year

EMPLOYMENT SUBSIDY TO EMPLOYERS  Support for hiring people belonging to risk-groups Young long-term unemployed persons (age 16-24)(at least 6 months) Long-term unemployed (at least 1 year) Ex-prisoners  Subsidy paid during 6 months  Subsidy is 50% of the hired persons wage, but no more than 1 minimumwage established by the Government (192.- €)

COMMUNITY PLACEMENT  Temporary work  No special skills are needed  Organized by local government or nonprofit institution  Can last up to 10 days per month and no more than 50 hours  Salary is at least 1 minimumwage  The participant remains the right to receive unemployment subsidy

VOCATIONAL GUIDANCE  Testing  Suggestions for suitable work, education or career  For unemployed persons and persons who have been notified of redundancy

JOB EXERCISE  For long-term unemployed persons  To develop a habit of work  Up to 3 months Participant will receive 50% of scholarship

MEASURES FOR DISABLED PERSONS  Adapting workplace and – equipment (1923 €)  Free use of necessary technical auxiliaries  Help in the work-interview (signlanguage)  Working with a support person (during 1 year)

Funding In 2005, approximately 6,5 million € spent on active employment measures (through the Labour Market Board)  State budget 62%  European Social Fund 38%

Gender Issues  Quite new  There is a department of gender equality in the Ministry of Social Affairs  Soviet time – equality ruled  After regaining independence, the role of women has changed

Women on the labour market  Smaller income (about 25% less than men) throughout the whole life  Smaller wages because of: 1. Different sectors 2. Hierarchy 3. Simple discrimination

Solutions  Legislation  Information and opinion building. Increase the value of woman in the eyes of the society.  Increase the level of competitiveness of women  Develop a more flexible system of social support (flexi-time work for women with small children)

The other side of gender equality The average lifetime of men in Estonia is 65 years. The average lifetime of women in Estonia is 76 years. The difference is 11 years...

Project Handicapped People Employed in Co-operatives (HAPECO)  Duration: January 2005 – July 2008  6 target regions in Estonia (covering about 50 % of the country)

Problem:  The rate of unemployment of disabled people is very high in Estonia - 74 %!  Exclusion from both social and working life

Target group: Disabled people (with disabilities that prevent them from finding work in a “usual” way) General Idea: Working is the best defense against poverty and exclusion. Work instead of welfare!

General Objective The project supports the equal opportunities for disabled people for participation in working and social life through thorough and flexible training and creation of social enterprises. Our aim is twofold – 1. to raise the independence of disabled people (for those that want it) by enabling them to take an active role in the economy and achieve a greater sense of self-worth 2. to raise awareness of the contribution that disabled people can make to society.

Objectives Raise the awareness of the society and the decision-makers. Integrate the results of the project into policies Create a network of organisations supporting the integration of disadvantaged people. Test new methods and tools for supporting the employment of disabled people

Activities for the target group Business consolidation Company creation Training, counselling, advising, many-sided support Involving participants

Active involvement of the participants  Active involvement of the participants. They are all members and owners  Social cooperative is the best form of enterprise in this case, as all the members have equal rights to make decisions about everyday management, finances, future plans etc.  1 member – 1 vote  Social aspect and team work  Self-esteem and self-realisation

Expected results Social cooperatives in each target region. The main aim is not to gain profit, but to improve the quality of life of the target group

Results by October 2006:  Active work in the 6 regions (groups of 10 – 15 people in each region)  Basic training almost finished  Vocational training going on  Cooperatives being legally formed  The first cooperative is ready! On Saaremaa island, 7 handicapped women open a children’s daycare centre on November 1.

Awareness-raising To raise the awareness of the society and the decision-makers about the situation of the target group and the new methods of improving their quality of life:  Continuous information: Radio broadcasts, newspaper articles, seminars in all the target regions for decision-makers To integrate the results of the project into policies on local, national and European level:  Awareness raising and demonstrating best practices will gradually lead to more attention paid to the problems of disabled people, support the establishment and financing of active measures - support structures etc.  Raising the awareness of entrepreneurs will encourage and promote and the employment of disabled people

Innovative aspect This model is absolutely new in Estonia. If we succeed, the model can be used in other regions for the rehabilitation of similar target groups.

CHALLENGE EQUAL is not just a delivery programme. It is an opportunity:  To try out new ways of working and to find out what works  To influence policy on European, national and local level

Thank you! Merit Trei NGO Eurohouse Tallinna 10A Kuressaare Estonia