ABSTRACT
This chapter examines the impacts of transition from a planned economy to market economy on living standards and welfare among the rural population in south-eastern Estonia following radical changes in the field of agriculture during the 1990s. It focuses on survey research conducted in the small and remote rural municipality of Kanepi in 1999. It discusses the socio-economic changes taking place following on an agricultural reform during the first half of the 1990s. The chapter provides useful insights into the problem of poverty in rural areas in all post-socialist countries. It highlights the depth of regional inequality in employment: unemployment rates are much higher in rural than urban areas. An alcoholism, violence, crime, and social isolation continue to increase among Kanepians. During the transitional phase, it is useful to examine income inequality and poverty at two different levels: the regional and the local levels.
