New statistics: Working lives have extended slightly more than life expectancy
The development of working lives seems moderate when examined with a new indicator from the Finnish Centre for Pensions based on the relationship between the expected duration of active working life and life expectancy. The calculation of the labour years ratio was decided in connection with the 2017 pension reform.
According to the new statistics, the labour years ratio is 0.60 in 2024. For men, the ratio is 0.63 and for women 0.57.
“The labour years ratio basically means that today’s 18-year-old men spend 63 per cent of their remaining life working. For women, the corresponding figure is 57 per cent”, says Statistics Researcher Jukka Lampi of the Finnish Centre for Pension. Since 2005, the labour years ratio has increased by 4.5 per cent. The expected duration of active working life has increased slightly more than life expectancy. By the end of 2023, the expected duration of active working life has risen by 3.3 years and life expectancy by 2.9 years.
The labour years ratio is the ratio between the five-year average expected duration of active working life and the five-year average life expectancy of an 18-year-old.
The Finnish Centre for Pensions will calculate the labour years ratio every year as of this year.
The 2024 labour years ratio has been calculated based on the figures for 2019–2023. The ratio has been calculated for the first time for 2005.
Calculation of labour years ratio one of the tasks of the Finnish Centre for Pensions
One of the goals of the 2017 pension reform is that working lives will grow in the same proportion as lifespans and, as a result, that people will defer retirement.
One way to assess this development is to measure the labour years ratio. It can be used to assess the state of the earnings-related pension system in support of decision-making”, says Statistics Manager Tiina Palotie-Heino of the Finnish Centre for Pensions.
Calculating the labour years ratio is part of the tasks of the Finnish Centre for Pensions. The calculation is based on Statistics Finland’s employment and mortality statistics. Working life monitoring was decided in connection with the 2017 pension reform and is the responsibility of the Ministry of Social Affairs and Health. Every five years, the Ministry assesses the development of working lives and the economic and social sustainability of the Finnish earnings-related pension system. The assessment takes into account the development of the labour years ratio and variables affecting it. The assessment will involve consultation with central organisations representing key employers and employees.
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