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Life expectancy by labor force status and social class: recent period and cohort trends and projections for Finland

Myrskylä, Mikko, Leinonen, Taina and Martikainen, Pekka (2013) Life expectancy by labor force status and social class: recent period and cohort trends and projections for Finland. Working papers (02/2013). Finnish Centre for Pensions, Helsinki, Finland.

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Abstract

Increasing longevity and decreasing workers-to-non-workers ratio are among the key demographic challenges of the developed world. Working longer is a potential remedy. However, little is known about how increasing longevity is distributed between work and retirement. We use Finnish register data for the years 1989–2007 to analyze period and cohort trends in life, work and retirement expectancies at age 50 by social class. The period and cohort perspectives complement each other as the period perspective describes what would happen to a cohort if it were exposed to a certain year’s conditions throughout life, and the cohort perspective describes what in reality happens to a cohort as it ages over time. We use the Lee-Carter method to complete mortality and linear extrapolation to complete the labor force participation of partially observed cohorts. Over the period 1989–2007, period life expectancy at age 50 increased 3–4 years for men and women. Old-age retirement expectancy increased about as much. Work expectancy declined in the early 1990s but has since been on an upward trajectory, being in 2007, at 9 years, approximately a year higher than in 1989 for both men and women. The fraction of years that are spent working at ages above 50 declined from 33% to 31% for men and stayed at 26% for women. These trends were similar across the social classes. However, there were large level differences as the upper classes have the highest life, work and retirement expectancies. For example in 2007, the work expectancy difference between upper non-manual and manual workers was 3.8 years (men) and 3.4 years (women); for old-age retirement the differences were 4.5 years (men) and 3.5 years (women). For cohorts born in 1939–1950, work expectancy increases tracked more closely the life expectancy increases. Life expectancy and work expectancy at age 50 increased by 1.6 and 1.5 years respectively for men, and 1.3 and 1.6 years for women. Thus the ratio between active and passive years is not becoming more disadvantageous for the later cohorts. Old-age retirement expectancy increased by 1.4 years (men) and 1.0 years (women); these increases were counteracted by comparable decreases in unemployment and early retirement. In contrast to the period results, the fraction of years spent working over age 50 increased from 27% to 30% (men) and from 23% to 26% (women) over the 1939–1950 cohorts. The trends were similar across social classes but showed large differences in levels, similar to those observed in the period perspective. Both the cohort and period approaches show that upper non-manual men are likely to work about four years and live about five years longer than manual men after age 50. For cohorts born in the 1940s, upper non-manual men can also expect to spend in total about 20 years in retirement, this is about 2 years more than manual men. Among women, the work and life expectancy advantage for the upper non-manual classes are about three and two years respectively and the total retirement expectancy among the 1940s cohorts is the same, 25 years, for all social classes. However, old-age retirement expectancy is about 4–5 years longer among upper non-manual men than manual men with the corresponding difference being three years among women. These are counter-balanced by opposite differentials for disability retirement.

Item Type: Monograph (Working Paper)
Official URL: http://www.etk.fi/en/service/home/770/home
Additional Information: © 2013 The Authors
Divisions: Social Policy
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Sets: Departments > Social Policy
Date Deposited: 29 Jun 2015 14:48
Last Modified: 20 Nov 2019 04:42
URI: http://eprints.lse.ac.uk/id/eprint/62533

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