On the whole, the various groups of wage earners receive pension at the same ratio of working lives to earnings. Time spent in retirement also accumulates at virtually the same level for wage earners and clerical employees when comparing men and women separately. Gender differences are greater than the differences between socioeconomic groups.
A newly released report of the Finnish Centre for Pensions titled Socioeconomic differences – working lives, retirement and the pension system reviews the working lives and retirement of manual employees, lower and higher clerical employees and the self-employed, as well as their respective status in the pension system.
The working lives of different wage earner groups do not differ much in length, but are focused to different stages of life. The working lives of manual employees start sooner, while those of higher clerical employees continue longer into old age.
There are significant socioeconomic differences in the use of the accelerated accrual. More often than others, manual employees stop working already before the old-age retirement age due to, for instance, unemployment or disability retirement. The accelerated accrual for those over the age of 63 is mostly utilized by higher clerical employees.
To each according to their earnings, but longer for women
The question remains, does everyone receive pension based on their earnings? The return received from pension contributions varies little between socioeconomic groups. The return of men in clerical positions is slightly better than that of male manual employees. In all groups, men received a clearly smaller return for their pension contributions than women did.
The pension level of clerical employees is higher than for employees in manual occupations. The difference is mainly due to wage differences during the working life. For the same reason, the pension level of women is lower than that of men. The differences in pension are slightly smaller than the income differences prior to the start of retirement.
The pension system largely reflects existing differences between socioeconomic groups and men vs. women in life expectancy, earnings level and working lives.
The Executive Summary (in English) to be published later
Special Researcher Noora Järnefelt, Finnish Centre for Pensions, Tel +358 29 411 2152, firstname.lastname(at)etk.fi
Head of Research Susan Kuivalainen, Finnish Centre for Pensions, Tel +358 29 411 2184, firstname.lastname(at)etk.f