Study: Lack of money forces Estonian pensioners to keep working

A study by the Center for Development Monitoring shows Estonia has the highest share among OECD countries of pensioners who continue working because they lack money. While an average of 35.1% of pensioners aged 50-69 across OECD countries named earning money as one of their three main reasons for continuing to work, in Estonia the figure was 60.6%.

Other reasons cited by Estonian pensioners for continuing to work include enjoying their job and wanting to stay active (22.9% of respondents) and maintaining social connections (6.9%). The OECD averages for these two reasons were 37.3% and 8.5% respectively.

Low pensions and labor shortages

According to the Center's data, Estonia and Iceland have the highest employment rates in Europe among people aged 65 and older. In Iceland's case, international comparisons point to an environment favorable to older people's participation in the labor market — Iceland, along with Japan and New Zealand, often ranks near the top of wellbeing indices for older people.

In Estonia, the main reason for high employment is the relatively low old-age pension — Estonian pensioners are among the leaders in Europe in terms of poverty risk. An acute labor shortage in certain sectors, such as education, also plays a role.

According to the Center's data, the employment rate in the 65+ age group in Estonia is more than twice as high as the European Union average, while among people aged 70-74 it is more than three times higher. Employment after reaching retirement age is also encouraged by Estonia's pension system, which allows people to receive both salary and pension simultaneously, meaning the system does not "punish" work during retirement age.