Division of work and retirement over adult life span in different socio-economic groups

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1 Division of work and retirement over adult life span in different socio-economic groups ICPM October 2015 Discussion Forum Noora Järnefelt

2 Social inequality in life expectancy Life Expectancies at age 50 by Equivalized Household Earnings Deciles, US Life Expectancies at age 50 by Equivalized Household Earnings Deciles, US 1920 cohort 1940 cohort 1920 cohort 1940 cohort Source: Bosworth BP & Zhang K (2015) Evidence of Increasing Differential Mortality. Center for Retirement Research at Boston College.

3 Social inequality in life expectancy: Finland Life expectancy of men aged 35 years by income quitiles Life expectancy of women aged 35 years by income quintiles Source: Tarkiainen et al. (2011) Disparity in life expectancy between income quintiles (in Finnish). Suomen Lääkärilehti (Finnish Medical Journal).

4 Social inequality in life expectancy:finland in comparison Life Expectancy at Age 35 for Educational Groups, Men Life Expectancy at Age 35 for Educational Groups, Women Low Medium High Low Medium High Source: van Raalte et al (2011) More variation in lifespan in lower educated groups: evidence from 10 European countries. Int. Journal of Epidemiology.

5 Attempts to increase statutory old-age pension age perceived unfair by blue-collar employees

6 Problem nobody had the facts Empirical challenges in investigating social differentials over (almost) ent span Several projects in the Finnish Centre for Pensions Differentials in the lenght of expired retirement spells (2011, FCP, not published) Retirement (and working-life) expectancies at age 50 (2013, Population Research Unit at Helsinki University) Education differentials in working-life expectancy at age 25 (2012, M. Nurminen, statistician & FCP) Actual (realized) length of working-life based on registers (2013, FCP) Social class differentials in actual length of working-life (2014, FCP) Finally: combining the two research trajectories (2014, FCP)

7 Retirement expectancy in Finland (for persons aged 50 years in 25.0 Men 25.0 Women Old age retirement expectancy Early retirement expectancy Old age retirement expectancy Early retirement expectancy Source: Myrskylä, Leinonen & Martikainen (2013) Life expectancy by labor force status and social class. Finnish Centre for Pensions, Working Papers 02/2013.

8 Total length of work life in Finland (for persons aged 50 years in 2007) Men Women Working life expectancy at age 50 Actual lenght of working life at age 50 Working life expectancy at age 50 Actual lenght of working life at age 50 Source: Actual length of working-life at 50: Järnefelt et al. (2014) Socioeconomic differences working lives, retirement, and the pension system. F Reports 01/2014. Working-life expectancy at 50: Myrskylä et al. (2013) Life expectancy by labor force status and social class. FCP, Working Papers 02/

9 Time at retirement/time at work over lifetime (for persons aged 50 years in 2007) % Total Self employed Upper whitecollar Lower whitecollar Blue collar Men Women

10 What about women outliving men and spending their pension money? Gender difference in life expectancy relatively high in Finland Women work nearly as long as men and usually full-time Women s average earnings-related pension 74% of that of men (for 65 years old) Challenge to equal pension system in two fronts

11 Lessons we learned Division of work & retirement over lifespan can be investigated Social differentials in life expectancy do not (necessarily) equal with differentials in retirement expectancy Disability pensions are an important, balancing element in the (Finnish) pension system Actuarial fairness important should not override the main principle: to provide adequate income security in old age

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