Ongoing Research Projects
Working life and its development
In an earnings-related pension system, continuous employment, career progress and earnings growth across the life course are key factors in determining economic wellbeing in old age. This project aims at investigating working life length, career breaks, job changes and earnings mobility across the life course, how they are linked and how they impact pension income. Moreover, it aims at analysing whether the relation between career stability and earnings mobility has changed across cohorts and whether the changing parameters of the Finnish pension system had an effect on how work and earnings translate into pension accrual. The project uses the ansiokehitys (AK20) data on earnings, pensions and employment spells for representative samples of birth cohorts 1905–1980 and spanning the years 1963–2019.
Researcher: Aart-Jan Riekhoff
In the face of population ageing, most industrialised countries search for ways to extend working lives as a means of improve the sustainability of their pension systems. A broad range of reforms has been implemented, including the closing of early exit pathways, the raising of official retirement ages and strengthening the financial incentives to work longer. At the same time, there is growing awareness of the need to invest in workers for them to be able to continue working, for example by promoting lifelong learning and healthy behaviour. However, whereas an overall trend towards longer working lives can be observed, there are differences between countries and inequalities between groups within countries. In this project, we aim to analyse the mechanisms of extending working lives from a comparative perspective. In addition, we aim to identify whose working lives are extending and whether there are differences between the genders and socioeconomic groups.
Researches: Kati Kuitto, Aart-Jan Riekhoff, Liisa-Maria Palomäki, Jan Helmdag (University of Stockholm)
- Riekhoff, A.-J. (2020) Mind the gap! Educational differences in average effective ages of retirement. Etk.fi-blog, 17.12.2020.
- Riekhoff, A.-J. & Kuitto, K. & Palomäki, L.-M. (2020) Substitution and spill-overs between early exit pathways in times of extending working lives in Europe. International Social Security Review, 73(2), forthcoming.
The part-time pension was abolished at the beginning of 2017 and replaced by the partial old-age pension. At that point, the age limit for both early retirement benefits was 61 years. In this study we examine the effects of these two early retirement benefits on early retirement and how the frequency of late career employment has changed. We form groups of people with similar backgrounds from different age cohorts who have lacked the ability to influence what type of early retirement benefit they have access to. By comparing these groups, we can outline the effects of changes in early retirement benefits.
Researchers: Ilari Ilmakunnas, Satu Nivalainen, Sanna Tenhunen
In the previous phase of this research project we identified persons in the 1987 birth cohort with long-term problems finding a study or work place. Around 10 per cent of the men and women had problems with labour force attachment. For men, the problems relate to exclusion, disability and unemployment. For women, disability and family situations are emphasized. The study data concerns those aged between 18 and 26 years. The aim of this follow-up study is to study the working life status of the same young people, now aged 27–32 years. We will examine what has happened to those who, in the initial phase of this project, were on a weak trajectory, as well as what risks those on a strong trajectory may have faced. In this second phase of the research project, we will also conduct a separate review of the young with only little education.
Researchers: Janne Salonen, Antti Saloniemi (Tampere University), Pekka Virtanen (Tampere University), Tapio Nummi (Tampere University)
This book project deals with labour market risks that challenge old age security. The contributions focus particularly on deteriorating labour market prospects among younger labour market generations, reflected in rising risk of unemployment and a disproportionate affectedness by new, atypical and in parts precarious work forms. These changes make it harder for current labour market generations to make sufficient savings for old age, given the lack of continuity in (sufficient) income. The book project is part of the EU COST Action CA17114 “YOUNG-IN – Transdisciplinary Solutions to Cross-Sectoral Disadvantages in Youth”.
Researchers: Kati Kuitto, Dirk Hofäcker (University of Duisburg-Essen)
Thanks to the most recent pension reforms, pension starts to accrue at a younger age than before. As of the 2005 reform, earnings-related pension started to accrue as of age 18 (instead of 23, as before). As of the 2017 pension reform, earnings-related pension starts to accrue as of age 17. This means that, more often than before, the earnings from a worker’s entire working life affect their accrued pension. However, the working of the youth and young adults has not been examined in detail. In this research project, we use the Finnish Centre for Pensions’ register data to examine how common it is for the young to work, what type of work they do and how background variables are linked to working. In addition, the aim is to illustrate how the work of the young affects their pension accrual. This research project offers new information to support the assessment of pension reforms.
Researchers: Ilari Ilmakunnas, Kati Kuitto, Susan Kuivalainen, Aart-Jan Riekhoff, Janne Salonen
- Ilmakunnas, I. & Kuitto, K. & Kuivalainen, S. & Riekhoff, A.-J. & Salonen, J. Nuorten työskentely ja eläkkeen karttuminen vuosien 2005 ja 2017 eläkeuudistuksen näkökulmasta [Work and pension accrual of young Finns from the point of view of the 2005 and 2017 pension reforms]. Eläketurvakeskuksen tutkimuksia 01/2021.
- Ilmakunnas, I. 17-vuotiaat työskentelevät pääasiassa kesällä – oppivelvollisuuden laajentaminen tuskin syrjäyttää nuorten työskentelemistä. Etk.fi-blog (in Finnish), 30.3.2021.
- Ilmakunnas, I. Opiskelija, valmistumisesi kartuttaa sinulle eläkettä. Etk.fi-blog (in Finnish), 16.11.2020.
In recent years, working in retirement has become increasingly more popular. In this project we examine how working in retirement has changed in recent years and how long the periods of working in retirement are. Working in retirement is examined both among those on a disability pension and those on an old-age pension. The data is based on composite data of income distribution and pension register data.
Researchers: Anu Polvinen
Retirement on a disability pension and receiving a sickness allowance have become less common in the 2000s, but in the last few years, the number of persons receiving these benefits has grown, particularly due to mental disorders. In this study, we examine trends relating to disability pension claims, retirement on a disability pension and rejected disability pension claims, and related predictive factors, particularly from the point of view of the benefit processes.} We examine the labour market position and the receiving of different social security benefits as predictors of retirement and pension claim rejections. The study is based on combined register data of Kela, the Finnish Centre for Pensions and Statistics Finland that covers the entire population of Finland. The research questions include: How has claiming and retiring on a disability pension developed in the 2000s in different population and diagnosis groups when looking at earnings-related and national pensions as a whole? Have the factors that predict retirement on a disability pension and the process of retirement on a disability pension changed in the 2000s? What is the labour market position and use of social security benefits of disability pension applicants before and after claiming a disability pension when considering also the rejected claims? The study is done in cooperation with Kela.
Researchers: Mikko Laaksonen, Jenni Blomgren (Kela), Riku Perhoniemi (Kela), Anu Polvinen
- Laaksonen, M. & Blomgren, J. & Perhoniemi, R. (2021) Mielenterveysperusteiset eläkkeet ovat yleistyneet nuorilla mutta vähentyneet vanhemmissa ikäryhmissä [The incidence of disability retirement due to mental disorders has increased among young people but decreased in older age groups]. Lääkärilehti 2021;76(36):1889–1897.
- Koskenvuo, K & Laaksonen, M. & Blomgren, J. & Pösö, R. & Seppänen-Järvelä, R. & Näsi, E. (2021) Selvitys kuntoutustukea saaneista. Aiempi tutkimus ja rekisteriseuranta vuonna 2015 kuntoutustuen aloittaneista [Recipients of fixed-term disability pension: An overview of existing research and a register-based follow-up of new recipients enrolled in 2015]. Kela Työpapereita 163/2021.
- Blomgren, J. & Laaksonen, M. & Perhoniemi, R. (2021) Changes in unemployment affect sickness absence and disability retirement rates: a municipality-level panel study. International Journal of Environmental Research and Public Health 2021;18(12): 6359.
In recent years one main objective of the changes carried out in the pension schemes has been to postpone effective retirement age. This project compares the actual effective retirement age and exit age in different Nordic countries and Estonia. Both indicators are calculated based on comparable data. The values of the expected effective retirement age in each country is calculated for 30-year-olds and for 50-year-olds. The project is updating the previous report published in 2008.
Authors: Jari Kannisto and Mika Vidlund (Finnish Centre for Pensions); Michael Jørgensen (ATP, Denmark) and Annesofie Thorup Olesen (Danmarks Statistik); Kristiina Selgis, Hede Sinisaar and Elo Reitalu (Ministry of Social Affairs, Estonia); Haukur Eggertsson (Tryggingastofnun, Iceland); Atle Fremming Bjørnstad and Ole Christian Lien (NAV, Norway); Hanna Linnér (Pensionsmyndigheten, Sweden)
- Expected effective retirement age in the Nordic countries, Finnish Centre for Pensions, Statistical Report 2/2008.
In terms of extending working lives, it is important to know employers’ position on retirement and on continued working among workers who are approaching retirement age. The earnings-related old-age pension is flexible. The pension recipient can choose when to retire: anytime between their legal retirement age and the age when their pension insurance obligation ends. These age limits will rise gradually due to the 2017 pension reform. In this project we will examine employers’ positions on the rising age limits in general and in light of their own workers. We will also examine employers’ positions on an ageing workforce, personnel policy and their willingness to employ persons who are approaching their retirement age or who have already retired.
A questionnaire survey with public and private sector employers of different sizes will be conducted in 2021 to find out the position of employers on the above-mentioned issues. A similar survey was conducted by the Finnish Centre for Pensions in 2004 and 2011. The most recent survey will be conducted so that the results of the central questions are comparable with those of previous surveys.
Researchers: Noora Järnefelt, Mikko Laaksonen, Jyri Liukko, Aart-Jan Riekhoff
In this study we will examine factors underlying retirement as well as post-retirement perceptions. The study will be conducted as a questionnaire survey on the significance of factors relating to individual situation, work and the pension system for the timing of retirement. We will outline perceptions of how the financial and social situation changes at retirement and thoughts on working in retirement.
In the autumn of 2022, we will send a questionnaire survey to 5,000 randomly selected persons who have retired from work in the years 2019–2021. We will supplement the data with information on working life and retirement from the registers of the Finnish Centre for Pensions.
We will publish the first results in the autumn of 2023. The data will be processed in accordance with the GDPR. The answers of individual persons cannot be identified from the results. More information on the data protection responsibilities of the Finnish Centre for Pensions https://www.etk.fi/en/about-us/responsibilites/data-protection/.
Researchers: Sanna Tenhunen, Noora Järnefelt, Susan Kuivalainen, Jyri Liukko, Satu Nivalainen, Liisa-Maria Palomäki, Anu Polvinen, Juha Rantala, Aart-Jan Riekhoff
The individual early retirement (IER) scheme which had relaxed medical criteria, was abolished as an independent program and fused into ordinary disability pension (DP) scheme in 2004. However, the conditions for DP were relaxed to match those under the abolished IER. At the same time, the lowest eligibility age for relaxed conditions was increased from 58 to 60 years. We analyse benefit applications and trends in receipt following the 2004 reform among cohorts affect-ed before and after the reform. Our intention is to analyse the composition of the groups pre/post reform. We use total register data of the Finnish Centre for Pensions from years 1995–2017.
Researchers: Ricky Kanabar (University of Bath), Satu Nivalainen, Mikko Laaksonen, Noora Järnefelt
As of the beginning of 2015, disability pension applicants who qualify for vocational rehabilitation have also received a preliminary rehabilitation decision. A key requirement to qualify for the preliminary rehabilitation decision is that the person has received a certain amount of insured income during the previous five years (€36,820.43 in 2021). It can be assumed that of those who have received a preliminary rehabilitation decision and are on both sides of the earnings limit required for rehabilitation share similar characteristics. In this study we explore the effects of the preliminary rehabilitation decision and participation in vocational rehabilitation on later pension and labour market events using regression discontinuity design (RDD).
Researchers: Mikko Laaksonen, Ilari Ilmakunnas, Samuli Tuominen
The aim of pension policy is to guarantee a reasonable economic wellbeing for all pensioners and to prevent poverty. In this study, we examine how income changes at retirement. We assess the change in income in terms of the individual’s own gross or net income and the household-specific equivalent income. When assessing income changes, we consider, among other things, the retiree’s pre-retirement income and labour market position, pension benefit, family status and gender.
In the first stage of the study, we calculate the changes in income based on the individual’s net income for those who have retired between 2000 and 2017. This way, we can examine what type of income changes have taken place in the initial stages of retirement after the early 2000s. In the second stage of this study, we review the impact of various income concepts on the overall picture of changes in income. When applicable, we also calculated the pension’s replacement rates. The study focuses on individuals who have retired in 2017. In the third stage of the study, we calculate the change in income based on the equivalent income, which allows us to take into consideration the retiree’s family status and the income of the other family members.
Our research data is based on the income distribution data panel of Statistics Finland and related data retrieved from other registers of Statistics Finland and the Finnish Centre for Pensions for the period 1995–2020.
Researchers: Juha Rantala, Marjo Pyy-Martikainen (Kela, the Social Insurance Institution of Finland), Marja Riihelä (VATT Institute for Economic Research)
- Miten nettotulot muuttuvat eläkkeelle siirryttäessä? Tarkastelu nettotulosuhteen muutoksesta vuosina 2002–2017 [How does net income change at retirement? A review of changes in net income ratio from 2002 to 2017]. Eläketurvakeskuksen tutkimuksia 04/2021.
This research focuses on structural changes of disability pensioners and the impact of the changes on the average income development of disability pensioners in the period 2000–2020. Our project is based on the observation that disability pensioners’ income has improved only moderately compared to that of old-age pensioners and that the number of disability pension recipients has decreased in the last 15 years. We analyse the structural changes in the population of disability pension recipients and the underlying causes via new disability pension contingencies, pension terminations and pension duration. The question is to what extent the above can explain the average development of the disability pension, or more broadly, the income of disability pension recipients.
Our research utilises register-based panel data of the Finnish Centre for Pensions and Statistics Finland.
Researchers: Juha Rantala, Mikko Laaksonen
- Have the pensions of disability pensioners been reduced? Yhteiskuntapolitiika nro 2/22, 2022 (April)
In this article, we look at how households’ age structure, equivalence scales and, more widely, housing are reflected in the economic well-being of retirees. The data consists of questionnaire survey data of the Finnish Centre for Pensions, consumption and wealth data of Statistics Finland and Eurostat’s EU-SILC.
Researchers: Kati Ahonen, Susan Kuivalainen
- Ahonen, K. (2019) Oma koti kullan kallis – Omistusasumisen, asumismenojen ja asumistyytyväisyyden yhteys eläkeläisten elämäntyytyväisyyteen. In Ahonen, K. & Kuivalainen, S. & Liukko, J. & Nivalainen, S. & Palomäki, L.-M. & Polvinen, A. (toim.) Tutkimuksia eläkeläisten toimeentulokokemuksista ja taloudellisesta hyvinvoinnista [Studies on retirees’ perceived and overall economic well-being]. Eläketurvakeskuksen tutkimuksia 02/2019.
- Ahonen, K. (2018) Kotitalouden rakenteen vaikutus ikääntyneiden sukupuolten välisiin köyhyysriskieroihin EU15-maissa ja Norjassa [Impact of household structure on the gender poverty gaps among the elderly in the EU15 countries and Norway]. Professional licentiate thesis in social insurance. Department of Social Research, University of Turku.
- Ahonen, K. (2019) Mihin sitä nyt kotoaan lähtis [Why would I leave home?]. Etk.fi-blog 21.8.2019.
- Ahonen, K. (2019) Jos Suomi olisi kuin Espanja [If Finland were like Spain]. Etk.fi-blog 8.5.2019.
The aim of this research project is to shed light on the various factors underlying the subjective views of economic well-being of older Europeans. We are interested in how subjective economic well-being is related to individuals’ income levels, source of income, poverty and life courses. We also compare countries and identify factors at the macrolevel that influence individuals’ and households’ economic well-being. The empirical analysis is based on multi-country survey data from EU-SILC and SHARE, in combination with data extracted from other external sources. Results will be published in international scientific journals on ageing and social policy.
Researchers: Liisa-Maria Palomäki, Kati Kuitto, Susan Kuivalainen, Aart-Jan Riekhoff
We continue producing new and up-to-date data on retirees’ perceptions of their livelihood and economic well-being. In the autumn of 2020, we will repeat the questionnaire survey “Pensioners’ income and economic well-being” that we carried out in 2017. The survey, carried out online and by post, is targeted at 55–85-year-old persons on an old-age and disability pension so that part of the respondents are new and part the same as in the previous wave. Our aim is to better recognize factors that affect pensioners’ perceptions of their livelihood and follow changes in these perceptions during retirement.
In our analyses, we focus on reporting on the central indicators (for example, financial satisfaction, covering regular and necessary expenses, consumption). However, we will also produce data on new subjects such as incurring debt, wealth, financial relations between the spouses and causes that prevent working in retirement.
Researchers: Kati Ahonen, Susan Kuivalainen, Anu Polvinen, Liisa-Maria Palomäki, Anniina Kaittila (University of Turku)
- Ahonen, K. & Palomäki, L.-M. (2021) Ikääntyneillä aiempaa harvemmin toimeentulo-ongelmia. Työeläke-lehti (in Finnish), 7.12.2021.
- Palomäki, L-M. & Ahonen, K. & Ilmakunnas, I. & Kuivalainen, S. & Polvinen, A. (eds.) (2021) Eläkeläisten toimeentulokokemukset vuonna 2020 ja muutos vuodesta 2017 [Pensioners’ perceived economic welfare in 2020 compared to in 2017]. Eläketurvakeskuksen tutkimuksia 05/2021.
- Ilmakunnas, I. & Palomäki, L.-M. (2021) Eläkeläiset antavat taloudellista apua jälkikasvulleen – harva vastaanottaa sitä itse. Etk.fi-blog (in Finnish), 12.11.2021
- Kuivalainen, S. & Palomäki, L-M. & Ahonen, K. & Ilmakunnas, I. & Polvinen, A. (2021) Vuosi pandemiaa takana – Puolet eläkeläisistä kokee elämänlaatunsa heikentyneen. Etk.fi-blog (in Finnish), 26.3.2021.
In this paper, we explain how Canada and Finland diverge interestingly from dominant pension trends, Canada in the Anglo-Saxon context and Finland in the Continental European context. We argue that there is an exceptional resemblance between the developments in these two countries. Crucial in this respect is the deliberate utilization of partial pre-funding and equity investment in trying to secure the economic and social sustainability of public pensions. In both countries, there are counter-tendencies to international pension trends on the benefits side (non-privatization), but, nevertheless, an increasing involvement in global pension fund capitalism on the investment side (marketization). The article broadens the understanding of pensions by highlighting the intertwinement of public insurance and investment in pension arrangements. The analyses are based on academic, governmental and other expert literature and published statistics.
Researchers: Jyri Liukko, Aaron Doyle (Carleton University, Ottawa), Turo-Kimmo Lehtonen (TUNI)
- Liukko, J. & Doyle, A. & Lehtonen, T.-K. (2022) Marketization without privatization. Recent tendencies of pension security development in Canada and Finland. Submitted, under review.
The Pension Barometer examines how well Finns know pensions and how well they think pensions are implemented. The Barometer reveals Finns’ perceptions of how well they will manage financially in retirement and measures their trust in the pension system.
The Pension Barometer is based on annual interviews carried out with about a thousand people who live in mainland Finland. The survey allows researchers to monitor how people’s opinions, perceptions and trust in the pension system change and develop.
Researchers: Allan Paldanius, Susan Kuivalainen, Sanna Tenhunen
This research provides a versatile and up-to-date view of retiree income and its development from 1995 to 2020. We examine income in terms of pension level, disposable income, wealth and perceived income. In addition, we assess retiree income via an international comparison. The data stems from the joint registers on pension recipients of the Finnish Centre for Pensions and Kela, Statistics Finland’s income distribution data, a questionnaire survey on the economic wellbeing of retirees conducted by the Finnish Centre for Pensions and Eurostat’s survey on income and living conditions.
Researchers: Juha Rantala, Susan Kuivalainen, Kati Ahonen, Kati Kuitto, Liisa-Maria Palomäki, Ilari Ilmakunnas, Marja Riihelä (VATT Institute for Economic Research)
In the most often used measure of poverty, the poverty threshold is based on the distance from the average equivalized household income. Typically, the threshold is set at 50 or 60 percent of equivalent national median disposable income. Despite the approach being popular, limitations are widely acknowledged. It is possible that changes in the poverty threshold can result in households entering or exiting poverty without any actual changes in their living standards. Additionally, it can be argued that this is more likely for some population subgroups than for others. Old-age individuals are likely to be this kind of group. Nevertheless, the poverty measure is widely used to evaluate economic disadvantage and its changes among old-age individuals. The aim of this study is to analyze how the picture of old-age poverty in European countries is shaped by changes in standard of living, employment and poverty thresholds. Changes in poverty rates among old-age individuals are compared to changes in poverty rates among both children and working-age individuals. The analyses are based on EU-SILC survey data.
Researchers: Ilari Ilmakunnas
In this study we outline Finnish citizens’ opinions and views on pensions and the reliability and future outlooks of the pension system. In addition, we examine Finns’ assessments of their retirement income and how they have prepared themselves financially for retirement. We also outline how much they know about pensions and of the impacts of the 2017 pension reform and how these impacts may affect retirement.
The study is based on a questionnaire survey sent to 5,000 randomly selected 25–67-year-old Finnish citizens. The dataset is supplemented with register data. The privacy statement (in Finnish) is applied to the processing of personal data.
Researchers: Sanna Tenhunen, Liisa-Maria Palomäki, Jyri Liukko, Juha Rantala, Susan Kuivalainen
- Tenhunen, S. (2021) Taloudellinen varautuminen eläkeaikaan. Kyselytutkimus eläketurvaan liittyvistä näkemyksistä [Financial preparation for retirement. Questionnaire survey on views relating to pensions]. Eläketurvakeskuksen tutkimuksia 03/2021.
- Tenhunen, S. (2021) Lisääkö epäluottamus eläketurvaan suomalaisten säästämistä? Etk.fi-blog (in Finnish), 5.5.2021
- Palomäki, L.-M. (2021) Samassa veneessä – Luottamus eläketurvaan yhdistää työssäkäyviä. Etk.fi-blog (in Finnish), 26.1.2021.
- Tenhunen, S. (2021) Eläkevarojen sijoitustoiminta heijastuu suomalaisten luottamukseen eläkejärjestelmää kohtaan. Etk.fi-blog (in Finnish), 7.1.2021.
- Kuivalainen, S. & Tenhunen, S. (2020) Lapsen hoidosta karttuvaa eläkettä ei tunneta. Etk.fi-blog (in Finnish), 19.10.2020.
- Tenhunen, S. & Ilmakunnas, I. & Kuivalainen, S. & Liukko, J. & Mustonen, J. & Palomäki, L.-M. (2020) Miten hyvin eläkeasiat ja vuoden 2017 eläkeuudistus tunnetaan? Kyselytutkimus eläketurvaan liittyvistä näkemyksistä [How familiar are Finns with pension issues and the 2017 pension reform in Finland? Questionnaire survey on views relating to pensions]. Eläketurvakeskuksen tutkimuksia 04/2020.
- Tenhunen, S. (2020) Kuinka hyvin eläkeasiat tunnetaan? Työeläke 5:2020, s. 14–15.
- Palomäki, L.-M. & Ilmakunnas, I. & Kuivalainen, S. & Liukko, J. & Mustonen, J. & Tenhunen, S. (2020) Luottamus eläketurvaan vuonna 2019. Kyselytutkimus eläketurvaan liittyvistä näkemyksistä [Trust in the pension system 2019. Questionnaire survey on views relating to pensions]. Eläketurvakeskuksen tutkimuksia 07/2020.
Financial sustainability of the pension system
In this paper, we examine reports of national expert groups in Finland and France. These reports were published in 2013 as preparatory documents for a possible pension reform. The goal of the paper is to understand what kind of justifications are used in the context of pension reforms. We compare two countries with different pension systems and different institutional set-up in order to observe similarities and differences in justifying a fair and sustainable pension reform.
Researchers: Niko Väänänen, Jyri Liukko
We will assess how the statutory pension expenditure and the average benefits have developed, as well as the long-term financing of private-sector earnings-related pensions. We will assess the expenditure and contributions with the long-term projection model of the Finnish Centre for Pensions. The model simulates the operations of the statutory pension system and makes it possible to issue projections to meet the forecasting and planning needs of the pension system.
Schedule: Ongoing. Most recent report published in the autumn of 2019.
Researchers: Kaarlo Reipas, Heikki Tikanmäki, Mikko Sankala