Ongoing Research Projects

Working life and its development 

While retirement ages are rising and working lives are extending, working longer is challenging for some older workers. Especially those who have had long careers of performing demanding work may not be able to continue working beyond a certain age. Moreover, in the public debate it has been asked whether it is socially just that retirement ages for these workers rise in the same way as for others. In Finland, the 2017 pension reform introduced the years-of-service pension to offer a possibility to retire at the age of 63 for those with long and demanding working lives while the statutory retirement age started to rise.

In this project, using administrative register data from the Finnish Centre for Pensions, we study the recipients of the years-of-service pension between 2018 and 2023. We compare them to others who retired between age 63 and the rising retirement age on a disability or partial old-age pension, as these are the only remaining pension schemes that offer an exit route from paid employment before the statutory retirement age. The aim is to identify how specific the group of years-of-service pension claimants is in terms of their sociodemographic characteristics, career length and stability, health, the nature of their past jobs, and their pensions.

Schedule: 2024–2025

Researchers: Aart- Jan Riekhoff, Anu Polvinen

Each year, about 30,000 individuals between the ages of 17 and 68 receive an informal care allowance from their local wellbeing services county in exchange for providing informal care for a family member. This number has been on the rise over time. Informal care is a crucial yet understudied aspect of the Finnish welfare system. There is little systematic information regarding the characteristics of informal carers, the extent of informal care, and the impact of informal care provision on their lives in terms of labour force attachment, income, and pension accrual.

The objective of this study is to obtain information about the economic situation of informal carers. To address this question, we answer the following questions:
• Who are the informal carers?
• What do informal care spells look like in terms of the size and continuity of the informal care allowance?
• What do the careers of formal carers look like, and how is informal care associated with income and pension accrual

The informal care allowance accrues pension up to age 68, and thus informal carers can be identified in the registers of Eläketurvakeskus. We collect a comprehensive set of data about informal carers for years 2005-2022, such as background characteristics, labor force participation, income, pensions and receipt of benefits and pensions. The analysis is limited to informal carers aged between 18 and 68.

Schedule: 2024–

Researchers: Susanna Sten-Gahmberg, Jyri Heinänen

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: 2020–

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

Publications:

In this book chapter, we review empirical evidence on how working lives have been lengthening in different European welfare states and what kind of socioeconomic differences can be observed. Based on the evidence, we discuss whether the policy goal of extending working lives can be seen as socially sustainable and what could be done to support later exit from labour markets in different groups. The book chapter is part of the SustAgeable book “Social sustainability in ageing welfare states” (edited by Maria Vaalavuo, Kenneth Nelson and Kati Kuitto, Edward Elgar)

Schedule: 2023–2024

Researchers: Kati Kuitto and Kun Lee (University of Oxford)

Career length is one of the key indicators presented by the Finnish Centre for Pensions in relation to monitoring the development of the pension system and the implementation of pension reforms. The Finnish Centre for Pensions is the only Finnish institution to systematically release statistics and research data on career lengths in Finland. Career length based on the Finnish Centre for Pensions’ earnings and accrual register has been calculated since 2012. It depicts the length of time spent in an employment relationship or insured under the Self-employed Persons’ Pensions Act during the review period.

In this project, we develop alternative career length indicators which make use of register data. The indicators can be used alongside and as complements to traditional data on career length. The indicators include:

  1. length of employment, which depicts the time spent in the same employment relationship or time insured under the Self-employed Persons’ Pensions Act, (when employment relationships for the same employer include short breaks lasting for a few days, the periods of employment are combined into one employment relationship;
  2. length of career, that is, length of employment when combining different employment relationships and periods of self-employment (excluding overlaps);
  3. benefit period, which depicts the length of time on benefits for which pension accrues;
  4. active career, which depicts the length of a career, reduced by periods of benefits that overlap periods of employment and self-employment, such as parental leaves or long sickness leaves; and
  5. time of pension accrual, which includes time on benefits for which pension accrues both during and outside the career.

These indicators can be used to measure, among other things,

  • how many employment relationships or periods of self-employment careers consist of,
  • how much of careers are active working times, and
  • how much of the pensionable time is made up of benefits and of gainful employment.

The publications of this project describe how the indicators are formed and review how they are distributed between various population groups by gender, educational level, socioeconomic status and way in which the career ends (unemployment, disability pension or old-age pension following gainful employment). Career indicators are also compared between time periods and cohorts.

Schedule: 2022−2025

Authors: Noora Järnefelt, Mikko Laaksonen, Pauli Pekkala, Tarja Karjalainen

In recent years, light entrepreneurship (in Finnish: kevytyrittäjyys) i.e., self-employment through billing service companies, has become more common in Finland. In this study, we examine light entrepreneurs in years 2017–2022. We use detailed register data covering years 2012–2022 from Statistics Finland and the Finnish Centre for Pensions to study the careers of light entrepreneurs. We answer four research questions: 

  • What characterizes light entrepreneurs in terms of personal characteristics and employment history?  
  • What does light entrepreneurship look like, and how is it combined with other kinds of work? 
  • How do the careers of light entrepreneurs develop over time (before, while and after they are light entrepreneurs)?  
  • How does light entrepreneurship affect accrual of pensions? 

 The results from this research are of value in the development of legislation and policies regarding new employment forms, social security, and pensions, and more broadly for developing services for new types of employment. The results can also be of interest internationally and for academic research, as there is little information about individuals who engage in new forms of employment.

Schedule: 2023–2025

Researchers: Susanna Sten-Gahmberg, Aart-Jan Riekhoff , Susan Kuivalainen 

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   

Publications:

The outbreak of the COVID-19 pandemic and the subsequent lockdown in Spring 2020 caused a major shock to the labour market. Not everyone was affected by this shock to the same extent. One group that may have been particularly vulnerable were those graduating from secondary vocational or tertiary education during the pandemic, suffering potentially long-lasting consequences of the lockdown for their employment chances and earnings development.

In this project we study the employment and earnings trajectories of those who graduated and entered the labour market during the first months of the pandemic in Finland. We estimate the impact of graduating during COVID-19, as well as analyse inequalities between graduates in terms of gender, type of degree and the socioeconomic background of their parents. We use detailed monthly data from the Finnish Centre for Pensions on graduates’ employment, earnings and social benefits, coupled with data on graduates’ parents’ earnings and education.

Schedule: 2024–2026

Researchers: Aart-Jan Riekhoff, Satu Ojala (Tampere University)

Retirement 

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 

Publications:

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.

Schedule: 2020–2024

Researchers:  Noora Järnefelt, Mikko Laaksonen, Jyri Liukko, Aart-Jan Riekhoff

Publications:

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/.

Schedule: 2022–2025

Researchers: Sanna Tenhunen, Noora Järnefelt, Susan Kuivalainen, Jyri Liukko, Satu Nivalainen, Liisa-Maria Palomäki, Anu Polvinen, Juha Rantala, Aart-Jan Riekhoff, Susanna Sten-Gahmberg

In this research project we examine the link between the exceptional earnings-related pension index increase and retirement on a partial old-age pension and working. At the beginning of 2023, earnings-related pensions were raised by an exceptionally high earnings-related pension index. As a result of the increased earnings-related pension index, a clearly larger number of persons drew a partial old-age pension or retired on a full old-age pension at the end of 2022 than before. The aim of this project is to explain which factors were linked to drawing a partial old-age pension because of the earnings-related pension index. Later on, we will examine how retirement due to the exceptional earnings-related pension index is linked to, for example, working after drawing the pension.

Schedule: 2023–2025

Authors: Ilari Ilmakunnas, Susanna Sten-Gahmberg

The Finnish Centre for Pensions and the University of Tampere carry out a study that maps out rehabilitees’ views and experiences of the various stages of rehabilitation. Persons who participate in vocational rehabilitation in the form of a work trial in the spring of 2023 are interviewed for the study.

The study focuses on the following questions: What are rehabilitees’ experiences and views of applying for rehabilitation and drawing up a rehabilitation plan? What are the rehabilitees’ experiences of work trial and the time after the work trial? According to the rehabilitees, how does rehabilitation improve work ability and the possibilities to continue at or return to work? How does cooperation with the other parties involved work throughout the entire rehabilitation process, that is, during the planning stage, the work trial period and afterwards?

Schedule: 2022–2025

Authors: Jyri Liukko, Jarna Pasanen (Tampere University), Susanna Sten-Gahmberg

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 number of people retiring on a disability pension at a young age has increased throughout the 2000s. This study examines the employment history of young people on a disability pension using data on annual working days, earnings, pension accrual and pension amounts. It also examines the duration and permanence of retirement, as well as the study, sickness benefit and rehabilitation histories of young disability pensioners. The study is based on register data of earnings periods and social benefits available to the Finnish Centre for Pensions. The sample consists of persons born in 1989, 1990 and 1991 who are on a disability pension at the age of 30 or have been on disability pension at a younger age. The reference group is those who have not been on a disability pension before the age of 30.

Schedule: 2024–2025

Authors: Mikko Laaksonen, Susanna Sten-Gahmberg

Pension adequacy 

In this research project we examine how earnings change after drawing a partial old-age pension. Previously there were only rough descriptions of what happens to earnings when starting to draw a partial old-age pension. The aim is to illustrate in much more detail than before both changes in earnings and what earnings trajectories those who draw a partial old-age pension have. The study also provides new information on the intensity of working after drawing a partial old-age pension.

Schedule: 2023–2024

Authors: Ilari Ilmakunnas, Susanna Sten-Gahmberg

In this project, we examine household consumption (including structure, amount and consumption rate) in different age groups and age cohorts, as well as changes in them over the past decades. We examine consumption and changes in consumption based on age but also on the household’s life phase, family structure, socioeconomic status, income and residential area.

The aim is to publish several articles on this subject in the next few years. The intention is to gain up-to-date information on how consumption changes with age. The studies will be based on data from Statistics Finland’s Household Budget Survey.

Schedule: 2024–2026

Authors: Kati Ahonen and Sanna Tenhunen

In this article, we look at how households’ age structure, equivalence scales and housing are reflected in the economic wellbeing of pensioners. The data consists of questionnaire survey data of the Finnish Centre for Pensions, consumption and wealth data of Statistics Finland and Eurostat’s data on income and living conditions (EU-SILC).

Schedule: 2018–2024

Authors: Kati Ahonen, Susan Kuivalainen

Publications:

We continue to produce new and up-to-date information on pensioners’ perceptions of their livelihood and economic wellbeing. In the autumn of 2023, we will repeat the questionnaire survey “Pensioners’ income and economic wellbeing” that we carried out in 2017 and 2020. The survey, carried out online and by post, is targeted at the pensioners who responded to the previous surveys. Our aim is to better recognize factors that affect pensioners’ perceptions of their livelihood and follow changes in these perceptions during retirement.

In our analysis, we focus on the reporting on central indicators (for example, economic satisfaction, covering usual and necessary expenses, consumption), but we also present information from new viewpoints. They include incurring debt, wealth, financial relations between the spouses and causes that prevent working in retirement.

The material will also be used in the University of Helsinki’s research project Hoivan kustannukset (Costs of care), which looks at how old-age pensioners can afford care, meet health care and medical expenses and how their economic situation has changed relative to their health.

Handling personal data is governed by the privacy statements (in Finnish and Swedish): Tietosuojaseloste (pdf), Dataskyddsbeskrivning (pdf), Tieteellisen tutkimuksen tietosuojailmoitus_ETK_HY.

Schedule: 2020–2024

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

Publications:

 

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

Schedule: 2017–2026

Publications:

Widowhood is a critical life course event that entails not only profound grief, but also severe social and economic consequences. Spousal loss can significantly reduce household income, while expenses remain unchanged. Such a rapid drop in purchasing power, together with other psychological and social challenges, puts widows and widowers at a high risk of poverty and exclusion. Survivor benefit schemes aim at securing the wellbeing of widows and widowers. Yet, little is known about how pension systems can be designed to prevent widowhood-related poverty and reduce economic inequalities while remaining sustainable for future generations.

In this project we use the Survey of Health, Ageing and Retirement in Europe (SHARE) to study household income before and after the event of widowhood in a number of European countries. Furthermore, we investigate the to what extent the coverage and generosity of survivor benefits can mitigate the negative economic consequences of widowhood. This project is funded by a Netspar Comparative Research Grant.

Schedule: 2023–2024

Researchers: Aart-Jan Riekhoff, Zachary Van Winkle (Sciences Po Paris), Konrad Turek (Tilburg University)

Financial sustainability of the pension system 

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:

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