“Citizen participation in Finnish pension reforms”
Citizen participation in pension reforms becomes more challenging on the heels of population ageing. The rapid ageing of Finland’s population creates the need for carefully planned pension reforms to maintain the financial soundness of pension schemes. At the same time, the number of healthy and active older people, who want to contribute to said pension reforms, increases. In Finland, this participation occurs mainly through citizens’ initiatives. One such initiative was started in 2016 to bring the question of pension indexation into the Parliament for consideration. The goal of this initiative was to change pension indexation in a way that increases the pension benefits distributed. To balance out the increase in pension benefits, current workers and employers would have had to pay higher pension contributions, which would have lowered net incomes. The Finnish Parliament rejected the reform suggestion in 2017. Even though the initiative ultimately failed, the accompanying discussions clearly highlight social challenges. First, they highlight an age-bias in political participation in pension reforms that this political instrument creates. The citizens’ initiative was mainly put forth by older individuals. Younger individuals, who would have also been affected, had no opportunity to block it. Therefore, this study investigates how strong the age-bias in the 2016 citizen’s initiative was. Second, the discussions highlight a lack of consideration for the redistributive mechanisms of pension systems. These redistribute features entail that pension reforms also affect younger people, who pay contributions to pension schemes and who count on the continuity of pension schemes into the future. This study investigates to what degree the redistribute effects of the suggested pension reform were considered. Findings highlight possible social and democratic problems that citizens’ initiatives on pension reforms can bring about. Policymakers can use the findings to modify possibilities for citizen participation in Finnish pension reforms, thereby ensuring that citizens’ initiatives do not increase the generational conflict.
Financing: This study is part of the Strategic Research Council funded project “Tackling Biases and Bubbles in Participation (BIBU)”, consortium leader: Anu Kantola
Project period: 2017-2020
Researcher: Visa Rantanen, Kathrin Komp-Leukkunen
“Tomorrow’s realized retirement age: When Finns aged 50-65 years will retire”
Finland’s population is ageing rapidly. This demographic shift is changing Finnish society, and extending working lives has become a primary concern. As a reaction, researchers produced a rich body of knowledge on the realized retirement age, and policymakers introduced policy reforms to delay retirement. However, to know how big the pressure for pension reforms is and what the most promising reform strategies are, one would need to know the future. Exploring at what age Finns aged 50-65 years today will most likely retire is exactly what this project does. To do this, it merges approaches from life-course research and futures research, creating the new research field of future-oriented life-course research. This research field produces predictions that are more closely tied to theory and that use information with stronger relevance for the future than extant prediction methods. Also, it brings about new research methods, which require less previous knowledge and computational power than extant prediction methods, which makes them accessible to a bigger number of researchers. The analyses in this study combine quantitative and qualitative methods, including (a) a Delphi study to identify future scenarios, (b) qualitative interviews to understand the retirement intentions of Finns aged 50-65 years, (c) a survey among Finns aged 50-65 years, followed by cluster and sequence analyses, to identify types of working careers and retirement intentions, and (d) a macro-simulation using the results from the sequence analysis, to determine likely future changes in the realized retirement age. This project delivers a proof of concept that life-course influences can be used for futures research.
Financing: Helsinki University
Project period: 2017-2019
Researchers: Tuukka Niemi, Kathrin Komp-Leukkunen
“The long-term effects of unemployment on older workers: Studying life-course influences in social context” (NoWork)
Europe’s population is currently the oldest in the world, and it is still ageing. This demographic shift is changing societies in an unprecedented way. Researchers and policy-makers fear that we will now only have sustainable pension schemes and a sufficiently numerous, well-qualified workforce if people work until old age. Consequently, many current policies strive to increase workforce participation and delay retirement. But can such policies for older workers be effective? Life-course scholars argue that experiences have time-delayed effects. What people experience during youth and mid-age influences whether they work in old age. Thus, policies for older workers may intervene at too late an age to make a difference. This study investigates time-delayed effects on older workers. It focuses on the effects of unemployment spells, which are said to scar work biographies and permanently hamper careers. This study uses the life-course perspective and thereby joins the newly emerging group of empirical studies that consider entire work biographies to explain workforce participation in old age. Its unique contribution is that it considers the role of social context in the form of families and economic crisis. Family members often coordinate their workforce participation and retirement timing. Economic crises increase unemployment rates, which affects the meaning and experience of being unemployed. This study compares the “most different cases” of Finland, Germany, Italy, Poland and the United Kingdom. Data stem from life-history interviews in the “Survey of Health, Ageing and Retirement in Europe”, the “English Longitudinal Study of Ageing”, and a self-administered Finnish survey. The approach combines sequence, cluster, regression and correlation analyses. Findings refine theories on old age, life-courses, labour markets, welfare states, and economic crises. Policymakers can use the insight gained to refine labour market policies.
Financing: The European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No. 661580.
Project period: 2016-2017
Researcher: Kathrin Komp-Leukkunen