Working life and its development 

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.

Schedule: 2018–

Researches: Kati Kuitto, Aart-Jan Riekhoff, Liisa-Maria Palomäki, Jan Helmdag (University of Stockholm)

Publications:

  • 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.

Labour markets are changing profoundly as a result of globalization and technological change. In this project we investigate how these changes impact the stability of employment and careers. Focusing on industrial sectors, the aim is to observe whether there are trends towards de-standardisation and destabilisation of work life in recent decades. If changes in stability have taken place, have some groups been affected more than others? Special attention is paid to gender and socioeconomic differences. We also investigate whether certain interventions, such as workers’ skill-upgrading or firms’ investment in research & development, can have positive effects on employment stability and social mobility. We use register-based linked employer-employee data for the years 1988­­–2016 and an array of statistical methods for the analysis of longitudinal and multilevel data. At the same time, qualitative data is collected through interviews with stakeholders. Results will be published in a book and several journal articles.

Schedule: August 2018 – August 2020

Researches: Aart-Jan Riekhoff, Satu Ojala (TUNI), Pasi Pyöriä (TUNI), Katri-Maria Järvinen (TUNI), Liudmila Lipiäinen (TUNI)

Surviving a severe and acute illness, such as cancer, a heart attack or stroke, is likely to disrupt peoples’ lives and have long-term consequences in many ways. This not only applies to the person experiencing such a health shock, but also to others in the household. In this study, we investigate how couples adjust in the labour market when one of the spouses becomes gravely ill. Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE) and applying multichannel sequence analysis, we aim to identify typical combined patterns in couples’ labour market statuses before and after the health shock. In a next step, we analyse the factors that buffer or exacerbate the impact of the health shock. We are particularly interested in finding out whether socioeconomic inequalities between couples are reproduced or even magnified in the face of adverse life course events.

Schedule: September 2019–2021

Researches: Aart-Jan Riekhoff, Maria Vaalavuo (THL), Katja Möhring (University of Mannheim)

Life-course trajectories have become increasingly important for retirement and pensions as recent reforms have strengthened the link between lifetime employment and benefits, introduced measures to lengthen working lives and increased the role of private supplementary pensions. At the same time, life-courses are increasingly fragmented due to diversified and discontinuous employment, family dynamics, and migration. These developments raise concerns about the adequacy of pensions as well as socioeconomic and gender inequalities in old-age income not only for current, but also for future retirees. The articles of this special issue deal with life-course effects on inequalities in retirement and pensions. The collection provides strong empirical and comparative evidence based on micro- and macro-level data from affluent democracies across Europe and the OECD.

Schedule: 2019–2021

Researches: Kati Kuitto, Susan Kuivalainen, Katja Möhring (University of Mannheim)

Early career development in terms of labour market attachment and earnings is important for later life, but also for future pensions and thus income 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. 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 for identifying different early career paths and regression modelling for studying the effects of parenting leave breaks on earnings and careers. 

Schedule: 2016

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

Publications 

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. 

Schedule: 2020–

Researchers: Anu Polvinen   

Schedule: 2020–2021

Researchers: Ilari Ilmakunnas, Kati Kuitto, Susan Kuivalainen, Aart-Jan Riekhoff, Janne Salonen

Retirement 

In this study, we examine how the retirement intentions have changed between the years 2008 and 2018 and what underlies the intentions. We pay particular attention to how the 2017 pension reform has affected wage earners’ retirement intentions. Our study is based on data from the 2008 and 2018 Finnish Quality of Working Life Surveys, combined with register data of Statistics Finland and the Finnish Centre for Pensions. The study focuses on wage earners between the ages of 50 and 62.

Schedule:2020–2021

Researchers: Satu Nivalainen, Noora Järnefelt

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.

Schedule:2020–2025

Researchers: Mikko Laaksonen, Jenni Blomgren (Kela), Riku Perhoniemi (Kela), Anu Polvinen

Retirement on a disability pension has become less common in Finland since the early 2000s particularly among manual workers and the unemployed. Retirement on a partial disability pension has increased, on the other hand, particularly among the older working-age population. It is unclear to which extent this development depends on changes in health and work ability and to which extent it has been affected by other factors. 

In this study, we use questionnaire studies to measure the development of self-reported work ability in different population groups in the 2000s. The study is based on the nationally representative Health 2000, Health 2011 and FinHealth 2017 data of the Finnish Institute for Health and Welfare. The perceived changes in work ability are compared to the changes that have occurred in retirement on a disability pension. 

Schedule:2019–2021

Researchers: Mikko Laaksonen, Päivi Sainio (Finnish Institute for Health and Welfare), Seppo Koskinen (Finnish Institute for Health and Welfare)

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.

Schedule: 2018–

Researchers: Kati Kuitto, Aart-Jan Riekhoff, Liisa-Maria Palomäki, Jan Helmdag (University of Stockholm)

Publications:

  • 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.

We examine which factors increase the likelihood of taking out a partial old-age pension. We are particularly interested in whether the expected life expectancy affects the decision to take out the partial old-age pension. The expected life expectancy is estimated through the lifespan of the parents. The dataset includes the register data of the Finnish Centre for Pensions of persons who would have qualified for a partial old-age pension in 2018 and those who took it out. The data is supplemented with data on the parents’ birth and death years found in the registers of the Finnish Centre for Pensions.

Schedule:2020–2021

Researchers: Satu Nivalainen, Sanna Tenhunen, Susan Kuivalainen

The main aim of this study is to explore occupational class differences in retirement on a partial and full disability pension due to different diseases in Finland. The data is register data from the Finnish Centre for Pensions and Statistics Finland. Occupational class differences in retirement are studied separately for those working in the private and the municipal sector. Cox regression models are used to model retirement on a full and partial disability pension.

Schedule: 2020–2021

Researcher: Anu Polvinen

The project is based on the agreement made by the social partners in 2019 in which the Finnish Centre for Pensions was assigned the task to examine how the decision practices of vocational rehabilitation and earnings-related pension legislation correspond to each other, how the processes function and what the effects of vocational rehabilitation are. In this report, we examine legislation relating to rehabilitation within the earnings-related pension scheme, legal grounds and application directives. In addition, the report includes a review of domestic research on the effectiveness of rehabilitation within the earnings-related pension scheme and the functionality of the processes. The decision practices in relation to legislation, as well as the appropriateness, functionality and efficiency of rehabilitation within the earnings-related pension scheme are handled based on interviews with pension experts. For the report, we interviewed expert physicians and rehabilitation experts of earnings-related pension providers as well as the experts of the Pension Appeal Court. 

Schedule: 2019–2020 

Researchers: Jyri Liukko 

Publications:

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.

Schedule: 2020

Researchers: Ricky Kanabar (University of Bath), Satu Nivalainen, Mikko Laaksonen, Noora Järnefelt

The share of fixed-term disability pensions, that is, cash rehabilitation benefits, of all starting disability pensions has increased. Currently more than half of the starting disability pensions are granted for a fixed term. The disability pension is granted as a fixed-term benefit if there is reason to believe that an individual’s work ability can be restored and the person can return to work. A considerable share of the cash rehabilitation benefits is later converted to a disability pension valid until further notice. In this study we use register data of the Finnish Centre for Pensions to examine the conversion of cash rehabilitation benefits to disability pensions valid until further notice and the return to work of persons on a cash rehabilitation benefit.

Schedule:2019–2020

Researchers: Mikko Laaksonen, Heidi Nyman

In this study, we examine the differences in disability retirement between municipal and private sector wage earners. The study is based on available register data of the Finnish Centre for Pensions. Incidences of disability retirement are calculated by various individual-level factors. In addition, sector-specific differences in disability retirement are examined using statistical models so that the effects of individual-level factors are taken into consideration in the models. Retirement on a partial and a full disability pension are examined separately. The cause of disability is also taken into consideration.

Schedule: 2019–2020

Researcher: Anu Polvinen

We investigate how the expected life-expectancy affects the timing of retirement. Expected life-expectancy is evaluated based on parents’ lifetime and age. Moreover, the effect of basic individu-al and family-related factors is investigated. Total register data of income distribution (possibly from years 2007–2017) combined with register data of the Finnish Centre for Pensions and information on parents’ birth and death dates from Statistics Finland is used as a data.

Schedule: 2020–2021

Researchers: Satu Nivalainen, Sanna Tenhunen, Susan Kuivalainen

The main idea of this study is to examine how often partial disability pensioners move to full disability pension and how age, education, employment, employment sector, pension type and cause of disability are associated with retirement on full pension after partial disability pension.

We used register data (70 % sample from Finns) from Finnish Centre for Pension. The data included 5,277 partial disability pensioners aged 2058, whose partial disability pension started in 2010 or 2011. The follow-up time was four years from the beginning of the partial disability pension. Competing risk analysis was used to model full disability retirement.

Schedule: 2019–2020

Researchers: Anu Polvinen, Mikko Laaksonen

Pension adequacy 

The aim of the pension policy is to secure a reasonable level of income (in relation to pre-retirement level) for all pensioners and to prevent poverty. In this study we review how the pension policy aims have been realised in the early stages of retirement. Changes in income at retirement are measured through the pensioner’s own gross or net income and the household-specific equivalent financial income. Where appropriate, the pension replacement rates are also calculated. When assessing changes to the return we consider, among other things, the income and labour market position before retirement, family background and gender. Special attention is paid to new pension benefits, particularly the partial old-age pension.

In the first stage of the study, the changes in income are calculated for those who retired in 2017. In the second stage, the review is expanded to cover the period 2000–2018. This way, we can examine what type of changes have taken place after the early 2000s in the income of the early stages of retirement and what the replacement rate is at retirement in relation to the pre-retirement income. The research data is the income distribution data panel from 1995 to 2018 of Statistics Finland’s covering the entire household population. The study is carried out in cooperation with senior researcher Marja Riihelä of VATT Institute for Economic Research. The first research results are expected to be published towards the end of 2020. 

Schedule: 2020-2021

Researchers: Juha Rantala, Marja Riihelä (VATT Institute for Economic Research)

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.

Schedule 2018–2022

Researchers Kati Ahonen, Susan Kuivalainen

Publications:

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. First, we are interested in how subjective economic well-being (SEW) is related to individuals’ income levels, source of income, socioeconomic status and gender. Second, the project pays special attention to how household structure and various household members’ resources affect SEW. Third, we aim to compare countries and identify factors at the macrolevel that influence individuals’ and households’ SEW. The empirical analysis is based on the EU-SILC survey data, in combination with data extracted from other external sources. Results will be published in international scientific journals on ageing and social policy.

Schedule: 2020–2022

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

Life-course trajectories have become increasingly important for retirement and pensions as recent reforms have strengthened the link between lifetime employment and benefits, introduced measures to lengthen working lives and increased the role of private supplementary pensions. At the same time, life-courses are increasingly fragmented due to diversified and discontinuous employment, family dynamics, and migration. These developments raise concerns about the adequacy of pensions as well as socioeconomic and gender inequalities in old-age income not only for current, but also for future retirees. The articles of this special issue deal with life-course effects on inequalities in retirement and pensions. The collection provides strong empirical and comparative evidence based on micro- and macro-level data from affluent democracies across Europe and the OECD.

Schedule: 2019–2021

Researchers: Kati Kuitto, Susan Kuivalainen, Katja Möhring (University of Mannheim)

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.

Schedule: 2020–2022

Researchers: Kati Ahonen, Susan Kuivalainen, Anu Polvinen, Liisa-Maria Palomäki, Anniina Kaittila (University of Turku)

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.

Schedule: 2018–2020

Researchers: Jyri Liukko, Aaron Doyle (Carleton University, Ottawa), Turo-Kimmo Lehtonen (TUNI)

Publications: Liukko, J. & Doyle, A. & Lehtonen, T.-K. (2020) 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 annual survey allows researchers to monitor how people’s opinions, perceptions and trust in the pension system change and develop. 

The Pension Barometer is based on annual telephone interviews carried out five years in a row with 1,000 persons between the ages of 17 and 79 who live in mainland Finland.

Researchers: Mikko Kautto/Jaakko Kiander, Susan Kuivalainen, Sanna Tenhunen

Schedule: 2017–2021

Publications:

This study aims to gauge Finnish people’s knowledge in pensions; their confidence in the pension system and the possible associations between knowledge and confidence. The research considers both subjective, self-assessed pension knowledge and a more objective measure of knowledge about key features of the pension system.

The research bases on quantitative analysis of data gathered from the Pension barometer surveys in 2017, 2018 and 2019. Each annual barometer consists of interviews of around 1 000 Finns representing the general population of Finland aged 19 to 79 years old.

Schedule: 2019–2020

Researchers: Sanna Tenhunen, Susan Kuivalainen

In this research project, we address the nature of self-employment, self-employed persons’ income, their retirement intentions and pension insurance from several different viewpoints. We look at the level of the self-employed persons’ pension insurance, particularly at underinsurance. The aim is to find out, among other things, which self-employed persons underinsure themselves and how self-employed persons’ subjective perception and knowledge of pension insurance relate to underinsurance. Finally, we also examine how the self-employed view retirement and what kind of work intentions (for example, working while drawing a pension) they have towards the end of their working life.

The data consists of an Ad Hoc module on self-employment collected in connection with the 2017 Labour Force Survey. We use both descriptive and econometric analysis in our studies.

Schedule: Autumn 2018–2021

Researchers: Satu Nivalainen, Sanna Tenhunen

Julkaisut:

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.

Schedule: 2019–2021

Researchers: Sanna Tenhunen, Liisa-Maria Palomäki, Jyri Liukko, Juha Rantala, Susan Kuivalainen

Financial sustainability of the pension system 

The aim of this book is to offer an extensive description of the investment operations in the Finnish earnings-related pension system, related regulations and supervision and their development. The book is a collection of articles written by experts in the pension field. In addition to practical investment operations and factors relating to supervision, the articles also explore the backgrounds of investment regulations and supervision. The book follows the path of Työeläkevarat ja eläkkeiden rahoitus [Pension assets and pension financing] by versatilely emphasising factors relating to pension financing and pension investments in light of the structure and legislation of the Finnish pension system.

”Investment operations in the Finnish earnings-related pension system” is a collection of articles consisting of an introduction and nine separate expert articles. The articles deal with the development of investments and earnings-related pension financing, practical pension financing, risk management, investment regulations and supervision, and earnings-related pension investments in general.

Schedule: 2019–2020

Researchers: Eeva Poutiainen and Sanna Tenhunen (eds), and 11 pension experts

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.

Schedule: 2018–2020

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

Publications: