Research on Working Lives and Their Development

The length and timing of working life and the earnings received during that period affect the pension level. Working lives also affect the financial sustainability of the pension system. The socio-political aims of extending working lives increase the need for research data of the subject.

At the Finnish Centre for Pensions, we conduct research on the length of working lives and on the earnings accrued during working life. We study the working conditions, the stability of the working life and the retirement intentions of different wage earner groups. We review the initial, mid- and final stages of working life. Using various scenarios, we also assess the long-term development of working lives.

Working lives may include interruptions that are due to, for example, periods of unemployment, studies or parental leaves. Data on the frequency and allocation of unpaid periods between population groups, as well as of working life after breaks, are significant from the point of view of both the pension provision and employment.

Our research on working lives is mainly based on national data, but international comparisons offer perspective, for example, when assessing the magnitude of gender gaps or differences between socioeconomic groups.

Current research projects

Parenthood as early career earnings risk (PAECER)

Aim: Early career development in terms of labour market attachment and earnings is important for later life, but also for future pensions and thus incomes in old age. In this project, we study the effects of parenthood, parental leave breaks and other career discontinuities on labour market attachment and earnings development of young Finnish women and men.

Realization: We use register data of the Finnish Centre for Pensions and Statistics Finland’s data for cohorts born between 1967 and 1987. We carry out trajectory analyses in order to identify different early career paths and crucial covariates that are explaining those employment trajectories.

Schedule: 2016–2019

Researchers: Kati Kuitto, Janne Salonen, Jan Helmdag (University of Greifswald)

Substituting exit pathways in Europe

Aim: The aim of this study is to analyse the substitution or spill-over effects of reforming early exit pathways in Europe. Closing off options for early exit has often been problematic: certain groups of older workers may continue to need early exit routes and other social insurance and benefit schemes take over the role of the reformed pathway. We analyse to what extent early retirement, disability and unemployment schemes act as substitutes and whether cutbacks in one scheme are followed by expansions in the others.

Realisation: We use macrolevel data from Eurostat on inactivity due to disability, retirement and long-term unemployment among the population aged 55–64 in 20+ EU countries between the years 1995–2017. We also look at expenditure data from Eurostat for the same period and the same countries. To check for the robustness of our results, we use EU-SILC data for 2004–2014 on the actual receipt of pensions, unemployment benefits and disability benefits within our age group.

Schedule: 2018–2019

Researchers: Aart-Jan Riekhoff, Kati Kuitto, Liisa-Maria Palomäki

Will working lives become fragmented?

Aim: We analyse industrial working lives in three sectors (metals, chemicals and forestry) between the late 1980s and early 2010s. We look at different dimensions of possible career fragmentation: de-standardization, destabilization and changes in career mobility. We analyse the contributions of individual factors (gender, education, year of birth and industry of employment) as well as structural factors (economic recession, automatization and digitalization).

Realisation: The (quantitative) analysis is mainly based on FLEED. The first part of the analysis will be centred around sequence analysis. In the second part, other methods, such as growth curve analysis and diff-in-diff, will also be considered.

Researchers: Satu Ojala (Tampere University), Aart-Jan Riekhoff (Finnish Centre for Pensions), Liudmila Lipiäinen, Pasi Pyöriä, Katri-Maria Järvinen (Tampere University)

Young people displaced from the labour market

Aim: Being displaced from the labour market has wide-ranging effects in terms of the future pension provision. In the first phase of this study, we will examine how many people face the danger of being displaced and what happens when the displacement lasts for a long time. Our research question relates to how big a share of the youth face the danger of being excluded from the labour market. Our review period is 2005-2014 and we will focus mainly on the 1987 birth cohort. In our research, we will apply the so-called trajectory analysis to find out the employment trajectory of the youth.

Realization: We will use the research register data of the Finnish Centre for Pensions, in addition to Statistics Finland’s data on occupation, socioeconomic status and educational level, in order to make a statistical modelling.

Schedule: 2015–2019

Researchers: Janne Salonen (Finnish Centre for Pensions) and Tapio Nummi, Pekka Virtanen, Antti Saloniemi, Liudmila Lipiäinen (Tampere University)