Adapting to shrinking and ageing population 

Estonia has a shrinking and ageing population, which poses a strain in providing and financing public services (education, healthcare, water…). The Commission, through OECD, analysed the situation and provided recommendations to “shrink smartly” and prepare the regions for demographic changes. 

Context 

Estonia's total population, which amounted to 1.32 million in 2019, has been shrinking by 15% since its independence in 1991. This decline has not happened evenly across Estonia: population grew in the two main cities of Tallin and Tartu, while some more rural counties have lost more than a third of population. Many rural areas are also experiencing ageing population. 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. So, communities must identify other arrangements to ensure adequate service provision.  

Support delivered 

OECD performed in-depth analysis of the Estonian situation and provided policy recommendations in three main areas (i.e. spatial planning, financing local public services and education) on which stakeholders provided their feedback. Subsequently OECD developed an Action Plan for each main area where the recommendations have been further developed. 

Results achieved 

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.  

More about the project 

• You can read the final report here:

  General publications 6 April 2023 Shrinking Smartly in Estonia: Preparing Regions for Demographic Change

• Press release: Estonia, the EU and the OECD find new ways to manage shrinking areas | Ministry of Finance of the Republic of Estonia (rahandusministeerium.ee) ;  
• Video: How do we shrink smartly and sustainably - Lessons from Estonia