In 2023, a total of 66,400 foreign workers were employed in Estonia, accounting for 9% of the total annual employment. Between 2019 and 2023, the number of foreign workers in Estonia nearly doubled. While the influx of Ukrainian war refugees contributed significantly to this increase, the share of foreign labour had already risen to 7% by 2021.
Estonia’s labour migration policy is based on an annual immigration quota (0.1% of the population) and its exceptions. However, the quota only limits labour migration from third-country nationals with temporary residence permits—who accounted for just 12% of all foreign workers with temporary residence permits in 2023.
“Besides labour migration and recipients of international protection, Estonia’s labour market is also influenced by intra-EU mobility, family migration, and educational migration,” explained Silja Lassur, OSKA research manager.
“People arriving in Estonia for different reasons fill different gaps in the labour market,” said Lassur. She noted that those with short-term stay permits are mostly employed in skilled or low-skilled jobs. Similarly, recipients of international protection tend to enter the labour market through these sectors, where Estonian language proficiency is not mandatory. Among those who migrate for work purposes, one-third are top specialists. EU citizens also tend to fill more top specialist roles.
Labour Shortages Persist
According to OSKA analyst Andres Viia, the need for foreign labour is likely to grow in the coming decade: “The sustainable development of Estonia’s economy and society depends significantly on the availability and quality of the workforce. At the same time, the population is ageing, and the number of young people entering the labour market will not offset the number of those exiting.”
Viia emphasized that while the state can mitigate labour shortages through various measures—such as education policy, reducing unemployment, and upskilling the local workforce—domestic resources remain limited, and foreign labour will continue to be necessary to some extent.
OSKA estimates that Estonia will face an annual shortage of around 1,400 top specialists until 2035, with the greatest deficits in ICT, education, healthcare, and manufacturing. In ICT and manufacturing, foreign labour could help alleviate the shortages.
In terms of skilled workers, there will be a yearly shortfall of about 700. If no other solutions are found, foreign labour will be needed in the transport and warehousing sector, social care, and manufacturing.
Currently, the proportion of foreign workers in low-skilled jobs is high due to Ukrainian war refugees, but this share is expected to decline over the next 10 years. Simultaneously, the number of low-skilled jobs is also expected to decrease, which means there likely won’t be a need to import such labour at the current scale.
Clear Objectives Needed for Migration Policy
According to Ulla Saar, Deputy Secretary General of Labour Market at the Ministry of Economic Affairs and Communications, the OSKA report is vital for facilitating evidence-based discussions on the topic of qualified labour in Estonia.
“Labour shortages have long been a major concern for Estonian businesses, and in EU comparison, access to skilled labour in Estonia is among the lowest. The state can address this through higher birth rates, upskilling and reskilling of the existing workforce, and improving labour productivity. However, these are not quick fixes, and in many sectors the shortage of labour is already critical. Foreign labour could help fill these gaps and complement the competences of the local workforce,” Saar explained.
The OSKA report concludes that Estonia’s migration policy is fragmented, complex, and filled with exceptions, making it difficult for both employers and migrants to navigate.
To better manage and utilise foreign labour in the future, Estonia’s labour migration policy needs a comprehensive review. Clear, unified goals and general principles must be established, including links with other forms of migration. The labour migration policy should define both short- and long-term objectives, helping reduce inconsistencies while keeping the system flexible enough to allow adjustments when needed.
The labour market monitoring and future skills forecasting system OSKA is coordinated by the Estonian Qualifications Authority and financed by the European Social Fund.
