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At the start of the millennium, young highly educated men in their early 30ies topped the Estonian salary charts. Over the past decade, the best-earning bunch has been ageing by about a year per year, says Mare Loos in her Master’s thesis recently defended at economy faculty University of Tartu.
Thus, the statistics reveal that the young men who made it big at the beginning of 2000ies are still pocketing the best salaries. In her thesis, Ms Loos, based on Statistical Office data, studied highly educated and fully employed men’s and women’s salaries in 1989–2012. Her aim? Finding out labour market shifts in Estonia as a society in transition.
«In Estonia, quite a few studies have been done on the over-educated older generation i.e. people being educated more highly than requited by jobs held, and on how the 1990ies winning generation came to be. Meanwhile, studies in similar states-in-transition show the changes continued impacting the labour market for a longer term. Of the period in its entirety, Estonia lacked a comprehensive overview,» said she.
As revealed by previous studies, transitional societies tend to have more of elderly highly educated people working at low-skilled jobs while the younger ones do the more complicated stuff. Thus, the youth tends to enjoy a better position, having acquired more up-to-date knowledge that fits the market economy better.
Meanwhile, the older labour force may not be motivated to re-educate itself to use new technology, and their knowledge acquired during the planned economy era will phase out somewhat as the transition takes place – their skills no longer in demand on the market.
It must immediately be underlined that clear trends only emerged with men. For female behaviour on the labour market, there’s no clear-cut pattern.
«Women are on child leave for certain periods of time and that causes wage loss,» explained Ms Loos. Also, the tendencies are hazy at the beginning of 1990ies when the shift into market economy was exceedingly fast. According to Ms Loos, her findings largely fit the transition state pattern from elsewhere in the world: in the second half of 1990ies and the beginning of 2000ies, a demand existed for youth with freshly acquired higher education and in the 2000ies the demand shifted towards the older employees again.
While, at the turn of the century, young men were the best paid segment, then in 2012 top salaries were the lot of those aged 40–49. Still, we have not caught up with the West yet, where the salaries are the largest when people are in their early 50ies.
For the 50+ folks, life has not been too much of a bed of roses in Estonia for these past two decades. At the end of 1990ies, those over 50 were actually paid the least. At the beginning of 2000ies, they weren’t the bottom of the barrel any longer, but still significantly lost out to the youngest ones of 20–29.
From then on, the situation has improved; even so, the over 50ies earn considerably less than the top paid segment.
Ms Loos has detected a West-East discrepancy: in the West, it is the highly educated elderly who work at most productive posts; in Estonia, rather the reverse is true, especially so during the change of the millennia – as compared to the younger ones, the skills and knowhow of older labour force lacked in market value.