Four labour market transformations for pension policy stakeholders to keep an eye on
Working life is constantly changing. This has consequences for pensions as well. In Finland, the good news is that employment rates have been rising, careers have been relatively stable and various non-standard forms of employment are covered by the pension system. The challenge is to anticipate developments in the labour market that affect the economic and social sustainability of the pension system in the longer run.
Why retire? Because we can
While there is rich research on Finnish retirement, relatively little is known about personal motivations behind retirement decisions. In latest round of the Survey on Health, Ageing and Retirement in Europe (SHARE) Finnish pensioners were asked a simple question: Why did you retire? More than 80 per cent indicated that they retired because they became eligible for a pension. Compared to other European pensioners, the influence of poor health on retirement decisions in Finland raises concern.
Destabilised careers, poorer pensions?
Globalisation, deindustrialisation, automation, digitalisation and liberalisation are often believed to make working life more fragmented and unstable. We investigated such claims in the recently completed project “Fragmented work careers?” (“Pirstoutuvatko työurat?”), led by researchers of Tampere University. Overall, we found no definitive trends towards fragmentation and destabilisation in Finland. However, we identified persisting labour market inequalities between genders and socioeconomic groups. These findings have important implications for pensions as well.
Mind the gap! Educational differences in average effective ages of retirement
The Finnish Centre for Pensions recently reported that Finns continue to retire at a later age. In line with the rising eligibility age for the old-age pension, the average retirement age went up three months in 2019 compared to 2018. This can be seen as a successful outcome of a series of reforms in the Finnish pension system and labour market and is good news in many ways. However, figures of rising retirement ages tend to hide socioeconomic inequalities in extending working lives.
Low-skilled older workers and early exit from the labour market: It’s not just who you are and where you work, but also whom you work with
In Finland, like in most other advanced industrialised countries, low-skilled older workers are at a higher risk of early exit from the labour market than their higher-educated peers. To extend these workers’ working lives, relying on their own responsibility or implementing more government policies alone will not be enough: the help of employers is needed.
Finland’s policy-makers should focus on lifting older men’s employment rates
While negotiations to form a new Finnish government are ongoing, various commentators are pleading for the new government to be ambitious in its goals to raise employment levels. Only the question is: whose employment levels and by what measure? Some groups in Finnish society are doing well when compared the same groups in other countries, …