Tiiu Paas

This study investigates the role of accumulated human capital in how people adapt to shocks and how this is reflected in income dynamics. The analysis is based on detailed monthly administrative data from Estonia between 2016 and 2020, containing more than 800 thousand observations. The results show that people with higher human capital experience less income fluctuation and their potential for income losses is lower. The role of human capital becomes even more significant during a crisis. An important effect of subsidies was also evident during the crisis, when the risk of losing incomes for people with less accumulated human capital would have been even higher if there had been no additional state support in the form of subsidies and benefits. In light of the Covid-19 crisis and its specifics, it is crucial to continuously improve digital skills through education to cope with socio-economic development in the future.

Estonia is a country with a small economy and a high level of digitalization that was more ready for remote work during the COVID-19 pandemic than many other countries. This paper shows how a small and flexible society with its institutions reacted to turbulent times and what developments it has brought along. We use data from Statistics Estonia and other public sources, as well as previous qualitative studies on coworking spaces in Estonia. We conclude that employees’ preferences towards hybridity and remote practices and the readiness of employers to meet them, supported by the high pre-pandemic level of digitalization and developed ICT sector, could improve the revitalization of rural and deprived regions and reduce the socioeconomic disparities across Estonia.

It is widely recognized that the COVID-19 pandemic has seriously affected the activities of coworking spaces. To investigate the impact of the pandemic on such activities, this chapter explores and compares the effects of the pandemic observed at independently operated coworking spaces (CSs) located in the metropolitan areas of Central and Eastern European capital cities, namely, Bratislava, Prague, Tallinn, and Warsaw. This study therefore provides the first comprehensive insight on CSs in some Central and Eastern European countries. Collecting a sample of 112 independently run CSs, we built a dataset of virtual and on-site activities by searching their Facebook pages and analyzed it using frequency tables and multidimensional scaling techniques. We conducted in-depth interviews with 18 CSs to understand pandemic-driven changes and adopted a grounded theoretical approach. The results of the social media analysis and interviews highlight spatial and relational disparities with a sharp decrease in in-person events and a lower increase in virtual events.

During the COVID-19 pandemic, virtual coworking has rapidly emerged among other work practices. Studies have mainly focused on remote employees working outside traditional offices rather than coworking. Amid increasing uncertainties during the pandemic, this study aims to clarify the concept of virtual coworking and its relation to remote working, while exploring virtual coworking practices and challenges and outlining new ways of working. This chapter presents a comparative study between Estonia and Norway as two of the most digitized EU countries, with a focus on selected coworking spaces in Oslo and Tallinn and interviews with their managers. The findings show that the concept of virtual coworking relates to online community building and complements remote working. However, future ways of working seem to belong to hybrid forms that combine virtual coworking and remote working practices.

Many countries implemented wage compensation measures during the COVID-19 crisis to alleviate income losses and avoid employment reductions. We focus on the gender dimension of incomes in Estonia, which has been grappling with the highest gender wage gap in Europe, and investigate whether the crisis and related wage compensation may have worsened existing gender imbalances. Using detailed administrative datasets and EUROMOD microsimulation model, we show that the COVID-19 crisis had a significant negative effect on employment income for both men and women, but the wage compensation implemented in 2020 appeared to cushion these effects. Income losses were slightly higher for men, but the cushioning effect of the compensation was higher for women. Overall, income-related gender disparities did not change significantly during the crisis. Still, the wage compensation measure has contributed to preventing income-related gender disparities increasing further, particularly in the hotels and restaurants sector and wholesale and retail trade sector.

Cross-border cooperation creates possibilities for improving the economic performance of the economies of different countries and allows for the efficient use of resources by considering sector-specific conditions for cooperation. The objective of this paper is to provide a methodological framework for analysing the economic performance of selected blue sectors, suggesting additional information for the development of cross-border cooperation in two neighbouring countries: Estonia and Finland. The analysis of the economic performance of the selected blue sectors relies on the Amadeus database for both countries, the implementation of Data Envelopment Analysis (DEA), and the calculation of partial productivity measures. The results of the study show that, on average, blue sectors report good performance indicators in coastal regions, but there are also some signs of imperfect efficiency. The common pattern of imperfectly efficient blue sectors in both countries is due to an excess of some fixed assets, which convey extra costs for business activities and, to some extent, generate excessive environmental pressures. The special nature of a shared blue economic area between Estonia and Finland stipulates close cross-border cooperation as an important tool to improve the performance of the imperfectly efficient sectors through shared “best practice” operations, technologies, and infrastructures. However, the lack of appropriate cross-border statistical data restricts analytical opportunities and the development of policy recommendations.

Purpose: The purpose of this paper is to address the role of cognitive skills and extent of skill use at work in explaining the immigrant–native wage gap in Europe. The study targets immigrant–native disparities in literacy and numeracy cognitive skills, as important, yet not exhaustive factor behind immigrants’ wage penalty.Design/methodology/approach: The research relies on the Program of International Assessment of Adult Competencies data for 15 European countries. The empirical analysis employs multivariate regression analysis and incorporates the full set of plausible values for each skill domain, to correctly measure cognitive skills. To estimate standard errors, the authors employ Jackknife replication methodology with 80 replication weights and final population weight.Findings: The authors document that, on average, immigrants achieve substantially worse scores in literacy and numeracy test domains. Only highly educated immigrants tend to improve their skills over time in host countries. The results of wage gap analysis indicate that having cognitive skills, demographic profile and occupation category comparable to natives does not yield comparable wage rate. The remaining wage gap results from the systematic differences in skills application at work, as immigrants use their skills to lower extent, relative to natives.Originality/value: The research employs a novel measure of productive human capital, which accounts for cognitive skills in literacy and numeracy domains, and frequencies of skill use at work. It allows to more precisely evaluate the immigrant–native disparity in human capital application and its reflection on the wage rate.

After joining the European Union in 2004, the post-communist countries have dramatically changed their structure of expenditure for medical services. The cause of this is legislative and ownership changes in the new economy. The study analyzed the expenditure on medical services in the European Union with a special focus on Poland, Latvia, Lithuania and Estonia. The European Union countries were divided into clusters using different methods, that is, Ward’s, Two Step and Centroid Clustering. In the paper, the structure and changes in health expenses were presented according to the types of expenditures over the years 2004-2015. Countries were assigned to clusters based on three variables: medical products, appliances and equipment, outpatient services and hospital services. Variables were considered as a percentage of household budget. In Lithuania, Latvia and Estonia, there is a clear increase in the outpatient services spending compared to the hospital services expenditure.