ABSTRACT
Estonia is one of the small countries in the European Union. In terms of population, the Baltic tiger Estonia has shrunk since the re-independence of the Republic of Estonia in 1991. Within this general tendency to decline there are regions where population decline is small or even increasing, and other regions where a serious drop in population has not come to an end. According to many economic growth and decline theories and investigations by historians, population and labor development are among the bases of economic development. In the mid-1980s as Estonia started to gain more independence, the firms also redirected their activities gradually towards western markets. The population of Estonia until 2050 is projected to shrink between 7 percent and 34 percent according to different birth rates and migration developments. Foreign firms do not necessarily use their tax advantages to invest in Estonia.
