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The labour market, the working environment, and mental health and well-being

Key message
As an essential part of a person’s well-being, identity and use of time, work is closely related to mental health. The COVID-19 pandemic led to significant changes in the labour market and working environment. The changes in the organisation of work and workload and the related mental health implications affect work performance, which in turn has an impact on the employee’s salary, success in the labour market and well-being. In the changed situation, mental health indicators were, as expected, worse for people not participating in the labour market. However, they also worsened among many employees, whose occupational identity and sense of security were shaken. Women, who have more difficulties reconciling work and family life, as well as employees burdened with new urgent tasks (frontline workers, managers), were hit harder than others.

Work is an essential part of an adult’s life, affecting their economic, cultural, social and psychological coping abilities.

Compared to being away from the labour market, for reasons such as unemployment or parental leave, working is associated with a greater sense of well-being.

Working takes up a large part of a person’s time, and the working hours often cannot be freely chosen. According to Eurostat (2022), in 2021, the average working week in Estonia was 39 hours for men and 36 hours for women, while 21% of men and 15% of women had the benefit of flexible working hours. Compared to being away from the labour market for various reasons (e.g. unemployment, parental leave), working as such is associated with a greater sense of well-being. Work is an important source of self-development and self-determination and has a wider positive impact on well-being, because work provides social connectedness. However, there are a number of risks in the working environment and the organisation of work that affect well-being and mental health.

Working often requires physical and mental, as well as emotional, effort. The nature of work and working conditions are important for both the worker and their family members. Harvey et al. (2017) divide the work-related risk factors for well-being into three groups: imbalanced job design (e.g. working time is not enough to fulfil work tasks, effort-reward imbalance), occupational uncertainty (e.g. temporary work) and a lack of value and respect in the workplace (e.g. a low level of autonomy at work, i.e. unfair treatment or bullying and the exclusion of employees from decision-making). Eurostat (2021) ), 41% of women and 34% of men in Estonia considered their working environment harmful to their mental health in 2020, while 48% of respondents reported that health problems arising from work affect their daily activities. The main causes of stress were high workload, time pressure, and interaction with difficult colleagues and clients. A survey conducted in Estonia in 2020 (Eurofound 2020) showed that people also worry about a lack of savings and possible hardships in the event that they or a family member loses their job.

How one copes with work in times of rapid and unexpected changes, and how this affects mental health and well-being, depends not only on the person but also on factors such as the workplace, working conditions, family-related factors, and opportunities to reconcile work and family life. Recent international studies show that the mental health impact of the COVID-19 pandemic, which strongly shook the entire occupational sphere, has not been uniform across the entire population. Women, young people, frontline workers, and the infected and people close to them, as well as people who isolated themselves completely, suffered more mental health problems (Reile et al. 2021).

The purpose of this article is to show how the mental health and well-being of Estonian employees coming from different socioeconomic groups and working under different conditions has changed during the COVID-19 pandemic and how these changes are related to differences in working environments vis-à-vis other European countries.

The COVID-19 pandemic led to major changes in working environments

For Estonia, the COVID-19 crisis that began in 2020 was unprecedented, giving rise to a state of emergency, excess mortality, an overload in the hospital system, and restrictions on movement and activities. There were also major changes in the usual working environments and working conditions. Many studies (nt Kumar and Nayar 2021) have confirmed the negative impact of the pandemic on people’s mental health and well-being, including through changes in working conditions.

The pandemic has significantly changed the forms and ways of working for some people and threatened job stability for others, causing issues with coping and self-identification. The labour market impacts of the pandemic are more wide-ranging than just the absence of certain workers from work or the reduction or increase of workloads during the crisis. Changes in the organisation of work affect the types of workers participating in the labour market. The organisation of work and the workers’ mental health affect work performance, which in turn affects the workers’ income and success in the labour market. Changes in the organisation of work and workload ultimately affect mental health.


The pandemic accelerated changes in the ways, times and places of working. The number of people involved in platform work and especially remote work increased. In the EU, the share of people working from home increased from 5% in 2019 to 12% in 2020. According to Statistics Estonia, the share of employees in remote work was 9% in 2015 and 18% in 2019; it reached 31% in 2020. Most of them worked from home for all their working hours, while 11–15% worked from home for only a small fraction of the working time. By the beginning of 2021, the share of remote working had dropped to 21%.

Source: Eurofound 2020

The increase in remote working during the pandemic required both employees and managers to be able to implement and coordinate hybrid forms of work despite having no previous experience or norms for doing so. During the pandemic, the share of employment relations based on civil law contracts rather than employment contracts increased.

In connection with remote working, employees felt changes in both their mental and physical health, which prompted greater public attention to the issue of employees’ well-being. According to the Eurofound(2020) survey, 3–4% of respondents stated that remote work caused them stress, and 12% attributed the stress to an increased workload. According to the same survey, overall life satisfaction in Estonia, on a 10-point scale, decreased from 6.8 points in 2019 to 6.0 points in 2021. The decrease was somewhat more for men than for women. With the expansion of flexible forms of work, the need for additional competencies grew. ICT knowledge, risk management and analysis, product development, communication and management skills became more important. Everyone’s self-management skills, including the ability to independently plan and organise their work and take responsibility, became important. Employees became more aware of the significant impact of the working environment on their mental health.

Having a job as a factor supporting mental health

Employment as such can have a beneficial effect on mental health. The 2020 Eurofound survey reveals that the percentage of people who have experienced depression is more than twice as high among people who are unemployed than among those who are employed.

The proportion of people who have experienced depression is more than twice as high among people who are unemployed.

The respective figures for Estonia are 33% among the unemployed and 15% among the employed (Figure 3.4.1). Compared with other European countries, Estonia falls in the middle range in terms of the difference in the percentage of people who felt depressed during the previous week among the unemployed compared to the employed.

Figure 3.4.1. The proportion of people who had felt depressed more than half of the time in the previous two weeks, by labour market status, and the ratio of the proportion of depressed people among the unemployed and the employed
Figure 3.4.1

Source: figure by the authors, based on Eurofound data from 2020

Working from home has its advantages and disadvantages

A new aspect of work during the COVID-19 pandemic was the fact that many people were working from home. The Eurofound 2020 survey shows that in Estonia the proportion of those who were depressed most of the time in the previous two weeks did not differ significantly between those who worked from home (including those who had already been working from home before the pandemic) and those who did not work from home (Figure 3.4.2).

The change in work organisation due to remote working has slightly increased the proportion of depressed people.

However, it seems that the change in work organisation due to remote working has slightly increased the proportion of depressed people. This may be due to the fact that they may not have had the necessary tools or space to work from home, or they may have lacked the skills to do so (e.g. using video meeting tools) or were unable to get immediate help from colleagues when it was needed (Ainsaar et al. 2021). In addition, Estonia stands out among European countries in that it had a large share of depressed people among those who did not have the opportunity to work from home. A direct risk of infection makes them a vulnerable group.

Figure 3.4.2. The proportion of people who felt depressed more than half of the time in the previous two weeks by remote working status


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Source: figure by the authors, based on Eurofound data from 2020

The COVID-19 pandemic led to mental-health-threatening changes in workload

For many people, the pandemic led to changes in workload. There were those who suffered from a sudden increase in workload due to additional tasks related to the pandemic (e.g. frontline workers and managers dealing with crisis management and the coordination of frontline workers). However, there were also those whose workload decreased (e.g. people working in the service sector). Depression was widespread in Estonia, as well as in the majority of other European countries. This was especially noticeable among those whose workload decreased significantly during the pandemic (Figure 3.4.3), , so that having a job no longer gave them the customary sense of security.

Figure 3.4.3. The proportion of people who felt depressed more than half of the time in the previous two weeks by workload during the pandemic