By Orsolya Soosaar, Economist at Eesti Pank.

Data from Statistics Estonia show the average gross monthly wage rose in the second quarter by 5.5% to 2243 euros. Wage growth slowed in the private sector, while the collective agreements signed last year meant it was faster in the public sector in education, healthcare and public administration. The rise of 6.8% in the minimum wage from the start of April boosted the growth in wages that are below the average, while the growth in wages above the average slowed.

Recovering growth in the economy has supported growth in exports, and the improved performance of industry stands out in the wage data because of wages rising faster than the average in manufacturing and construction. Employers are again looking for additional staff, and that is supporting growth in wages and is reflected in a rise in the number of vacancies, especially in construction. The average wage in those sectors fell relative to the average in the economy during the recession, and it is now climbing back.

The labour force survey run by Statistics Estonia shows that unemployment was at 6.6% in the second quarter of 2026, and there were an estimated 10,000 fewer people out of work than a year earlier. The number of people in employment was also lower at the same time though, meaning that unemployment fell because labour force participation declined. Participants in the labour force are those who are in employment and those who are unemployed but are actively looking for work and are ready to start work within a short time.

Labour force participation may have fallen partly because the number of jobs on offer has been low for a long time and competition for vacancies has been tight. Equally, the change this year in the conditions for receiving unemployment benefits may have reduced the motivation for those who were previously not in the labour market to register as unemployed, and so may have affected their search for work. People who had not recently been in employment, such as those who had been studying full-time, at home with children, or caring for relatives, earlier had the right to receive unemployment benefits, but the basic level of unemployment insurance that has replaced those benefits requires them to have been in work previously.

Source: eestipank.ee