Employment in youth and pension accumulation in Finland - how recent pension reforms account for early career employment

Ilari Ilmakunnas and Kati Kuitto

Chapter 6 in Youth Employment Insecurity and Pension Adequacy, 2023, pp 90-104 from Edward Elgar Publishing

Abstract: One way to buffer individuals against career uncertainties and gaps is to lengthen the period during which mandatory pension accumulation occurs. Recent Finnish pension reforms lowered the age from which earnings-related pension is accumulated: the age threshold was decreased from 23 to 18 in 2005 and further to 17 in 2017. Employment during almost the whole life course now contributes to the level of earnings-related pension. This study provides a closer look at youth employment in Finland. We analyze how early employment and pension accumulation differ by gender and migration background. Furthermore, we illustrate how much of young individuals’ employment and earnings would not have been contributed to the earnings-related pensions without the pension reforms lowering the accumulation age limit. The study utilizes register data from the Finnish Centre for Pensions including all individuals of cohorts 1986-2003, and employment spells that have accrued pension for 2005-2019.

Keywords: Economics and Finance; Politics and Public Policy Sociology and Social Policy; Sustainable Development Goals (search for similar items in EconPapers)
Date: 2023
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