Estonia 2017 OECD economic survey acting for stronger and more inclusive growth
2017 OECD ECONOMIC
SURVEY OF ESTONIA
Acting for stronger and more inclusive growth
Tallinn, 15 September 2017
http:/ / www.oecd.org/ eco/ surveys/ econom ic-survey-estonia.htm
@OECDeconomy
@OECD
Main messages
• The Estonian econom y is gaining m om entum ,
underpinned by strong fundam entals.
• Inequality and poverty rem ain high. Redistribution in the
tax and benefit system is weak.
• Deeper integration into international trade and m ore
productive investm ent would support productivity growth.
2
Economic growth is gaining momentum
Source: OECD National Accounts Database.
3
Unemployment has declined significantly
Source: OECD Economic Outlook 101 database (updated with information available on 18 July 2017).
4
Wages have increased fast
Source: OECD Economic Outlook 101 database (updated with information available on 1 September 2017).
5
Public debt is the lowest in the OECD
Note: National account definition (not Maastricht).
Source: OECD Economic Outlook 101 database.
6
Well-being could improve
Source: OECD Better Life Initiative 2016.
7
Poverty remains elevated
Source: OECD Income Distribution database (IDD).
8
Income inequality is high
Source: OECD Income Distribution database (IDD).
9
Boosting inclusive and
greener growth
10
Fiscal policy can help foster inclusive growth
Source: OECD Economic Outlook database; calculations based on OECD (2017), OECD Economic Outlook: Statistics and Projections (database), June.
11
The tax-benefit system has little redistributive
impact
Source: OECD Income Distribution database (IDD).
12
Workers are exposed to health risks
Source: OECD Job quality indicators database
13
The gender pay gap is high
Source: OECD Employment database.
14
The transition to a greener economy is key
Source: OECD Green growth indicators database.
15
Key recommendations for fostering inclusive
and greener growth
In cre as e s p e n d in g o n m e as u re s th at bo o s t gro w th an d
w e lfare . Co n s id e r allo w in g a s m all d e ficit in th e go ve rn m e n t
bu d ge t ru le in th e lo n ge r te rm .
In cre as e s u bs is te n ce be n e fits . Re lax e ligibility co n d itio n s
fo r u n e m p lo ym e n t be n e fits .
In cre as e s an ctio n s fo r bre ach e s o f h e alth an d s afe ty
re gu latio n s . Re qu ire th at e m p lo ye rs p u rch as e o ccu p atio n al
accid e n t an d d is e as e in s u ran ce .
Exte n d th e s h are o f p are n tal le ave re s e rve d fo r fath e rs .
Se t tax rate s o n o il s h ale , ve h icle an d e n e rgy u s e at a le ve l
th at be tte r re fle cts th e e n viro n m e n tal d am age th e y
ge n e rate .
16
Seize trade and
investment opportunities
17
Productivity level and growth have been low
Source: OECD Productivity Database.
18
Trade could generate more income
Source: OECD/WTO (2016), Statistics on Trade in Value Added (database) and OECD (2016), "Trade in Employment: Core Indicators" in OECD Structural Analysis
(STAN) Databases..
19
Capital intensity is below the OECD average
Source: OECD Economic Outlook 101 database.
20
Investment in intangible capital is low
Source: OECD National Accounts database.
21
Skill shortages impede business growth
Source: European Investment Bank - EIBIS, EIB Investment Survey.
22
Many workers feel under-skilled at the time
of hiring
Source: CEDEFOP (2016), “Skills Panorama – The EU workforce: under-skilled at hiring” (http://skillspanorama.cedefop.europa.eu).
23
The lack of skills remains an issue after
some time in the job
Source: CEDEFOP (2016), “Skills Panorama – The EU workforce: under-skilled at hiring” (http://skillspanorama.cedefop.europa.eu).
24
Migration can help to address shortages
Source: Eurostat, Demography and migration database.
25
The business environment is favourable
Source: OECD (2013), Product Market Regulation Database.
26
The insolvency regime is not conducive to
firm restructuring
Source: Adalet McGowan, et al. (2017), “Insolvency Regimes, Zombie Firms and Capital Reallocation”, OECD Economics Department Working Papers, forthcoming.
27
Good access to finance is crucial
Source: 2016 SAFE Survey on the access to finance of enterprises.
28
The quality of infrastructure can improve
Source: World Economic Forum Global Competitiveness Index dataset.
29
Innovation capacity needs support
Source: Eurostat (2016), Community Innovation Survey (CIS) 2014.
30
Key recommendations for seizing trade and
investment opportunities
Co m p le te a o n e -s to p s h o p fo r ad m in is trative fo rm alitie s .
Im p ro ve acce s s to in fo rm atio n o n trad e re gu latio n .
Cre ate a ce n tralis e d cre d it bu re au th at w ill co lle ct bo th
p o s itive an d n e gative in fo rm atio n o n cre d ito rs
Allo w cre d ito rs to in itiate re s tru ctu rin g. In tro d u ce e arly
w arn in g m e ch an is m s . D e ve lo p o p tio n s fo r o u t-o f-co u rt
s e ttle m e n ts .
Es tablis h an in d e p e n d e n t bo d y to ad vis e o n p o licie s to
rais e p ro d u ctivity.
31
Key recommendations for seizing trade and
investment opportunities (cont.)
Stre n gth e n th e m o n ito rin g o f train in g co u rs e s . Exte n d
th e accre d itatio n s ys te m to all p u blicly fu n d e d le arn in g
p ro gram m e s .
Re lax an n u al qu o tas , an d s im p lify co n d itio n s fo r w o rk
p e rm its o f s kille d w o rke rs .
Carry o u t e x an te co s t-be n e fit an alys e s fo r all large -s cale
in fras tru ctu re p ro je cts bas e d o n a u n ifo rm m e th o d o lo gy.
Give m o re w e igh t to co o p e ratio n w ith th e p rivate s e cto r
w h e n allo catin g fu n d s to p u blic R&D in s titu tio n s .
32
For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without
prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers
and boundaries and to the name of any territory, city or area.
http://www.oecd.org/eco/surveys/economic-survey-estonia.htm
OECD Economics
OECD
33
SURVEY OF ESTONIA
Acting for stronger and more inclusive growth
Tallinn, 15 September 2017
http:/ / www.oecd.org/ eco/ surveys/ econom ic-survey-estonia.htm
@OECDeconomy
@OECD
Main messages
• The Estonian econom y is gaining m om entum ,
underpinned by strong fundam entals.
• Inequality and poverty rem ain high. Redistribution in the
tax and benefit system is weak.
• Deeper integration into international trade and m ore
productive investm ent would support productivity growth.
2
Economic growth is gaining momentum
Source: OECD National Accounts Database.
3
Unemployment has declined significantly
Source: OECD Economic Outlook 101 database (updated with information available on 18 July 2017).
4
Wages have increased fast
Source: OECD Economic Outlook 101 database (updated with information available on 1 September 2017).
5
Public debt is the lowest in the OECD
Note: National account definition (not Maastricht).
Source: OECD Economic Outlook 101 database.
6
Well-being could improve
Source: OECD Better Life Initiative 2016.
7
Poverty remains elevated
Source: OECD Income Distribution database (IDD).
8
Income inequality is high
Source: OECD Income Distribution database (IDD).
9
Boosting inclusive and
greener growth
10
Fiscal policy can help foster inclusive growth
Source: OECD Economic Outlook database; calculations based on OECD (2017), OECD Economic Outlook: Statistics and Projections (database), June.
11
The tax-benefit system has little redistributive
impact
Source: OECD Income Distribution database (IDD).
12
Workers are exposed to health risks
Source: OECD Job quality indicators database
13
The gender pay gap is high
Source: OECD Employment database.
14
The transition to a greener economy is key
Source: OECD Green growth indicators database.
15
Key recommendations for fostering inclusive
and greener growth
In cre as e s p e n d in g o n m e as u re s th at bo o s t gro w th an d
w e lfare . Co n s id e r allo w in g a s m all d e ficit in th e go ve rn m e n t
bu d ge t ru le in th e lo n ge r te rm .
In cre as e s u bs is te n ce be n e fits . Re lax e ligibility co n d itio n s
fo r u n e m p lo ym e n t be n e fits .
In cre as e s an ctio n s fo r bre ach e s o f h e alth an d s afe ty
re gu latio n s . Re qu ire th at e m p lo ye rs p u rch as e o ccu p atio n al
accid e n t an d d is e as e in s u ran ce .
Exte n d th e s h are o f p are n tal le ave re s e rve d fo r fath e rs .
Se t tax rate s o n o il s h ale , ve h icle an d e n e rgy u s e at a le ve l
th at be tte r re fle cts th e e n viro n m e n tal d am age th e y
ge n e rate .
16
Seize trade and
investment opportunities
17
Productivity level and growth have been low
Source: OECD Productivity Database.
18
Trade could generate more income
Source: OECD/WTO (2016), Statistics on Trade in Value Added (database) and OECD (2016), "Trade in Employment: Core Indicators" in OECD Structural Analysis
(STAN) Databases..
19
Capital intensity is below the OECD average
Source: OECD Economic Outlook 101 database.
20
Investment in intangible capital is low
Source: OECD National Accounts database.
21
Skill shortages impede business growth
Source: European Investment Bank - EIBIS, EIB Investment Survey.
22
Many workers feel under-skilled at the time
of hiring
Source: CEDEFOP (2016), “Skills Panorama – The EU workforce: under-skilled at hiring” (http://skillspanorama.cedefop.europa.eu).
23
The lack of skills remains an issue after
some time in the job
Source: CEDEFOP (2016), “Skills Panorama – The EU workforce: under-skilled at hiring” (http://skillspanorama.cedefop.europa.eu).
24
Migration can help to address shortages
Source: Eurostat, Demography and migration database.
25
The business environment is favourable
Source: OECD (2013), Product Market Regulation Database.
26
The insolvency regime is not conducive to
firm restructuring
Source: Adalet McGowan, et al. (2017), “Insolvency Regimes, Zombie Firms and Capital Reallocation”, OECD Economics Department Working Papers, forthcoming.
27
Good access to finance is crucial
Source: 2016 SAFE Survey on the access to finance of enterprises.
28
The quality of infrastructure can improve
Source: World Economic Forum Global Competitiveness Index dataset.
29
Innovation capacity needs support
Source: Eurostat (2016), Community Innovation Survey (CIS) 2014.
30
Key recommendations for seizing trade and
investment opportunities
Co m p le te a o n e -s to p s h o p fo r ad m in is trative fo rm alitie s .
Im p ro ve acce s s to in fo rm atio n o n trad e re gu latio n .
Cre ate a ce n tralis e d cre d it bu re au th at w ill co lle ct bo th
p o s itive an d n e gative in fo rm atio n o n cre d ito rs
Allo w cre d ito rs to in itiate re s tru ctu rin g. In tro d u ce e arly
w arn in g m e ch an is m s . D e ve lo p o p tio n s fo r o u t-o f-co u rt
s e ttle m e n ts .
Es tablis h an in d e p e n d e n t bo d y to ad vis e o n p o licie s to
rais e p ro d u ctivity.
31
Key recommendations for seizing trade and
investment opportunities (cont.)
Stre n gth e n th e m o n ito rin g o f train in g co u rs e s . Exte n d
th e accre d itatio n s ys te m to all p u blicly fu n d e d le arn in g
p ro gram m e s .
Re lax an n u al qu o tas , an d s im p lify co n d itio n s fo r w o rk
p e rm its o f s kille d w o rke rs .
Carry o u t e x an te co s t-be n e fit an alys e s fo r all large -s cale
in fras tru ctu re p ro je cts bas e d o n a u n ifo rm m e th o d o lo gy.
Give m o re w e igh t to co o p e ratio n w ith th e p rivate s e cto r
w h e n allo catin g fu n d s to p u blic R&D in s titu tio n s .
32
For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without
prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers
and boundaries and to the name of any territory, city or area.
http://www.oecd.org/eco/surveys/economic-survey-estonia.htm
OECD Economics
OECD
33