Research on Retirement

An extension of working lives requires a rise in the average effective retirement age. Therefore it is important that we study the routes to retirement. At the Finnish Centre for Pensions, we monitor and study the frequency and the effects on retirement of the new pension types: the years-of-service pension and the partial old-age pension. We also need data on the financial incentives of the pension system and how they affect the different population groups. In addition to the effective retirement, we also review the retirement intentions of the population and how employers relate to, for example, the employment of the elderly.

The working life of many ends when they retire on a disability pension. The number of starting disability pensions has decreased in recent years, while the number of partial disability pensions and cash rehabilitation benefits has increased. We also study the differences between population groups regarding the disability pension risk in various disease categories and the connection between retirement and health, work ability as well as working conditions.

In recent years, working while drawing a pension has become increasingly common. We produce data on the frequency and development of working while receiving a pension. In addition, we examine the pension reforms of other countries and how these reforms have affected the retirement age.

Current research projects

Employer role in work-to-retirement transition

Aim:  The effective retirement age has risen in the public sector but not in the private sector.  In this project, we examine in which type of private sector workplaces workers retire late and in which early. We study the end of working life of private sector wage earners in companies that employ more than 10 people. We examine how the structural features of the organisation affect the ending of working life and retirement, taking individual features into account. Structural features refer to relatively stabilised and slowly changing features of the employer organisation, such as the age structure and educational level of its personnel, as well as its size and field of business. We examine the link between the features of the employer organisation and the termination of working life in the context of competing routes (disability pension, unemployment and old-age pension) in the post-2005-pension-reform period up to 2014.

Realisation:  We make use of the Finnish Longitudinal Employer–Employee Data (FLEED). The research population are people born between 1947 and 1950 who work for a private employer with at least 10 employees. We follow them from age 55 to 68 or until they retire. In addition to a descriptive review, we use multilevel and survival mode models.

Schedule: 2018–2019

Researchers:  Aart-Jan Riekhoff, Noora Järnefelt, Mikko Laaksonen

Impact of company-level factors on retirement on a disability pension

Aim: Workplaces can take various measures to prevent and defer their employees’ retirement on a disability pension. In this study, we examine the importance of company-level risk factors on retirement on a disability pension and occupational rehabilitation. Our research questions include the following:

  • do employer-level factors make a difference on retirement on a disability pension when the individual-level factors have been taken into consideration, and
  • which register-based structural features that describe the employers may be connected to retire-ment on a disability pension.

Realisation: Sample of workplaces and their employees drawn from the register data of the Finnish Centre for Pensions. The data will be combined with the data on retirement on a disability pension. We use multilevel analysis to examine the associations of workplace-level factors to retirement on a disability pension.

Schedule: 2017–2018

Researchers: Mikko Laaksonen, Jyri Liukko, Juha Rantala, Anu Polvinen, Meeri Kesälä, Jarno Varis and Susan Kuivalainen (Finnish Centre for Pensions)

Register study of time before a disability pension, II

Aim: In order to reduce the number of starting disability pensions, it is important to know which factors contribute to the likelihood of retirement on a disability pension and which routes lead to retirement. The aim of this study is to use extensive, nationally representative data to produce current information on the events and development that lead to retirement on a disability pension. The study is a continuation of a project that ended in 2015 in which we studied what happened before retirement on a disability pension, that is, periods of sickness allowance, rehabilitation and unemployment.

Realisation: The study is based on data that combines the register data of the Finnish Centre for Pensions and Kela.

Schedule: 2016-2020

Researchers: Mikko Laaksonen, Anu Polvinen (Finnish Centre for Pensions); Jenni Blomgren, Annamari Tuulio-Henriksson, Lauri Virta, Karoliina Koskenvuo, Hannamari Heinonen (Kela); Laura Salonen (University of Turku)

Study of the years-of-service pension

Aim: The years-of-service pension will be introduced as a new pension type in Finland as of the beginning of 2018. The aim of our study is to examine the phases leading up to the application of a years-of-service pension and related individual and institutional factors. We will also look at questions and possible problems relating to the implementation and application of this new pension type.

Realisation: We will begin collecting document data (for example, pension applications, employer and medical statements) as of the beginning of 2018.

Schedule: 2016-

Researchers: Jyri Liukko, Mikko Laaksonen and Anu Polvinen

The Finnish pension reform of 2005 - The effect of rebelling and incentives on retirement

Aim: In this project we review how the financial incentives affect the retirement age and how the change of name of retirement affects the effective retirement age (for example, before 2005, a person could retire on an “early old-age pension” at age 63, but after 2005, the pension was called a “regular old-age pension”).

Realisation: The empirical section of the study is based on a total sample from the register data of the Finnish Centre for Pensions of 50-70-year-old Finnish citizens in the years 2000-2015.

Schedule: 2017–2018

Researchers: Ohto Kanninen (Labour Institute for Economic Research), Terhi Ravaska (Labour Institute for Economic Research) Jonathan Gruber (MIT), Roope Uusitalo (University of Helsinki), Satu Nivalainen (Finnish Centre for Pensions)

Who retires on a partial old-age pension?

Aim: In this study, we focus on people who have retired on a partial old-age pension in the first year since this pension benefit was introduced. We examine which factors contribute to an increased likelihood of retirement on a partial old-age pension. We use statistical analysis to investigate the link between individual factors and retirement on a partial old-age pension.

Realisation: From the registers of the Finnish Centre for Pensions, we pick the persons who were entitled to retire on a partial old-age pension in 2017. We examine who of them have retired and, using descriptive study methods and regression models, which factors have predicted that they were likely to retire on a partial old-age pension.

Schedule: 2018-

Researchers: Noora Järnefelt, Sanna Tenhunen, Satu Nivalainen and Janne Salonen

Working while drawing an old-age pension

Aim: The aim of this study is to examine how people who draw an old-age pension and have an income from work differ from other people on an old-age pension in terms of, for instance, education, socioeconomic status, income, gender or marital status.

Realisation: Our study will be based on a 10-per-cent random sample of the population living in Finland in 1995-2012, compiled by Statistics Finland.

Schedule: 2017–2018

Researchers: Anu Polvinen, Juha Rantala and Susan Kuivalainen