Estonia on bottom of Europe by labour market freedom20.05.2008, 09:02
MP Kalev Kukk writes that Estonia is among
the bottom four European countries by regulation of its labour market.
Kukk writes in Äripäev that the recent 2008 Index of Economic Freedom
published by The Heritage Foundation ranked Estonia on the bottom of Europe by
labour market regulation. On a scale of 1 to 100, Estonian labour market score
was 50.3 while Denmark had 99.9, Switzerland had 82 and Ireland had 80
“Even recent reports by the European Central Bank emphasise the need for
Estonia to increase the flexibility of its labour market, while neglecting to
mention any similar problems in Latvia or Lithuania,” writes the MP.
“Since The Heritage Foundation ranked Estonia 12th worldwide by economic
freedom even by such dismal labour market score, Estonia could have been as high
as fifth worldwide if its economic freedom score had been at least average and
Estonia would have been among free, instead of mostly free country,” writes
The Heritage Foundation wrote about Estonia’s labour market that the
regulation of labour relations is inflexible, reduces employment opportunities
and slows down productivity growth. Employee-related non-payroll costs are high
and making employees redundant is relatively difficult and costly. This is a
risk for companies that would like to hire more people and expand. Working time
restrictions are rigid.
Kukk ends his column by saying that he hopes that the new draft employment
contract act will help increase the flexibility of the Estonian labour market
and improve its overall economic freedom ranking.