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Educational expansion has improved labour force participation of over-55-year-olds in the last decades. Particularly women’s education level has increased rapidly. Labour force participation of low-educated people has increased at a lower pace in several Member States of the European Union. This is evident from a fresh research article by the Finnish Centre for Pensions.

According to the study, educational expansion explains, on average, 15–35 per cent of the increase in labour market participation among the population aged 55–74 in the 2000s. The study reviews the education level and labour market participation of older age groups in 26 European countries between 2000 and 2019.

The educational expansion of Finnish women of this age group explains 24 per cent of their rising labour force participation. For men, the equivalent figure is 14 per cent.

Underlying the growth in labour market participation is particularly the decrease in the share of the population with low education levels, followed by an increase in the share of those with high education levels.

 “The highly educated usually have better opportunities to continue working until a later age. The low-educated, on the other hand, are often in poorer health, suffer from wearing working conditions and have poorer opportunities to be re-employed, which weakens their possibilities to continue working”, says Senior Researcher Aart-Jan Riekhoff from the Finnish Centre for Pensions.

Women have caught up with men in terms of education level

Particularly women’s education level has increased rapidly. In the age group over 55-year-olds, the share of highly educated women is currently higher than the share of highly educated men in several European countries.  The share of highly educated women among the 55–74-year-olds is largest in Estonia, Finland and Sweden. 

In Finland, the share of highly educated women has grown considerably above average and the number of low-educated women has clearly dropped to below average.

Yet the labour market participation of both high-educated and low-educated Finns – men and women – has grown at a lower pace than in many other European countries.  

Gaps in labour market participation by education level growing

Overall, the share of low-educated persons of the population has declined. At the same time, the labour market participation rates of these groups have increased at a slower pace than of others, or even declined.

“Gaps in labour market participation by education level seem to be growing. That is why we should pay attention to the status of the low-educated. Particularly low-educated women are in a vulnerable position on the labour market, and their working lives are brittle”, Riekhoff explains.

Pension reform and changes in labour markets greatly impact employment

According to the study, the effect of education on the labour market activity of older people is significant, but a greater impact for the employment of older people is achieved through various pension and labour market policy measures, such as raising the statutory retirement age.

“Individual-level factors such as health, working conditiond and age discrimination are also imporant. However, we did not review them in this study”, explains Senior Researcher Kati Kuitto from the Finnish Centre for Pensions.

Educational expansion slowing down

Researchers point out that the educational expansion cannot continue endlessly but will slow down or even stop altogether. This has been the case in, for example, Finland.

 “Correspondingly, no rapid increase of the kind seen in the last decades is to be expected at least in those countries in which both the education level of the older population and their labour market participation rate are already at a relatively high level. The question is, what measures can be taken to extend the working lives of the older population in the future?” Kuitto asks.

Research article
Educational Expansion as a Driver of Longer Working Lives? was published in the journal Comparative Population Studies.

Parallel publication in Julkari.

Finnish Centre for Pensions – Central body of and expert on statutory earnings-related pensions