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Estonia, the EU and the OECD find new ways to manage shrinking areas

3. September 2020 - 11:43

Estonian experts together with OECD and European Commission will start a cooperation to find novel ways for adapting to shrinking population numbers in rural and remote urban areas. The aim of the project to be launched is to review Estonia’s current policy instruments to propose further tools, as necessary.

In Estonia, a country of 1.3 million inhabitants, only a few larger urban areas have experienced an increase in population size over the past three decades. Local decision-makers in shrinking areas face challenges such as half-empty apartment buildings, oversized technical infrastructure, and schools with declining numbers of pupils. Both national and EU resources have been used in shrinking areas to help streamline and uphold high quality public services. Despite these efforts, global trends like urbanisation, low birth rates and departure of young people mean that remote areas will continue to face population decline into the future.

Estonia’s Minister of Public Administration, Mr Jaak Aab stresses the importance of safeguarding strong and resilient rural and peripheral urban communities. “Estonia’s net migration has been positive during the past few years – a significant change in more than two decades. Nevertheless, in order to guarantee high quality living environments, settlements have to be condensed in many regions. Both on the national and local level, we have to find and apply novel ways to address shrinking areas: ensuring good access to high quality public and private services, supporting activities that promote good living environments, and streamlining technical networks.”

To review Estonia’s current policies and propose new spatial and structural approaches to handle shrinking areas in Estonia in light of approaches used across the EU and other OECD countries, experts from the OECD will work together with a wide array of Estonian stakeholders at the local and central level and also the European Commission up to the end of 2021. The goal of project is to come to actionable policy recommendations interventions linked to shrinkage and population ageing in Estonia. The project is supported by the European Union’s Structural Reform Support Programme.

Lamia Kamal-Chaoui, Director of the OECD Centre for Entrepreneurship, SMEs, Regions and Cities, notes that Estonia experienced a 2.1% population decrease between 2007 and 2017, and that one third of counties’ populations fell by more than 10%. Effective multi-level governance frameworks accounting for these differences and their effects allow for coordinated policies suited to tackling cross-cutting problems, such as industrial restructuring, infrastructure, fiscal sustainability, and managing demographic change.

“I congratulate Estonia for working on such a topical issue," says Mario Nava, Director-General of DG REFORM. There is a need to address the impact of demography on growth, sustainability, employment, health and long-term care in different parts of Europe. There is no one-size-fits-all approach. Policy-making needs to zoom into the reality on the ground, as Estonia plans to do with this project. Demography is a cross-cutting issue that needs to be taken into account in Europe’s recovery from the recent crisis. I look forward to the results of this project.“

The project is supported by the European Union Structural Reform Support Programme (SRSP), managed by the European Commission’s Directorate-General for Structural Reform Support (DG REFORM). The SRSP provides tailor-made technical support to EU countries on demand for the design and implementation of growth-enhancing reforms.


In Estonia, more than half of the counties have lost more than a quarter of their population over the past three decades. Over the years, various sectors have applied interventions to adapt to the changing situation. School networks have been re-designed both by local municipalities and by national initiatives, a network of primary health care centres has been developed, and financial support for the betterment of living environments and demolition of abandoned buildings has been obtained. Currently, Estonia’s national authorities are working closely with local governments to pilot the stages necessary to relocate people from half-empty apartment buildings, including overcoming practical obstacles, legal issues and to plan long-term activities and visions to uphold a sustainable settlement structure. At the same time, however, coordinated multi-sectoral approaches are currently lacking.

Depopulation in rural areas is a challenge that many EU countries are facing. The share of population living in metropolitan regions is growing, in many cases as a result of shrinkage in rural regions. The long-term effects of population decline for rural areas are lower tax income for local municipalities, a higher share of elderly people, a greater per head cost in the provision of services, and high costs for upholding technical networks that are oversized for shrinking areas.

Ortophoto from Estonian Land Board


Additional information

Sigrid Laev

Head of the Communication Department
Ministry of Finance
Suur-Ameerika 1, 10122 Tallinn
tel 372 611 3049 | mob 5635 7157 |