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Retirement Models and Debates

RN01S04

Thu 27. 8.  16:00 - 17:30
room FA 202

Life expectancy at age 50 by labor force status and social class: recent period and cohort trends and projections for Finland

RN01

Leinonen, Taina (1); Martikainen, Pekka (1); Myrskylä, Mikko (1,2,3)
1: University of Helsinki, Finland; 2: London School of Economics, UK; 3: Max Planck Institute for Demographic Research, Germany

*Background:* Working longer could help in tackling the challenge of an increasing old-age dependency ratio. However, little is known about how increasing longevity is distributed between work and retirement. *Methods:* We used Finnish register data for the years 1989–2012 to analyze period and cohort trends in life, work and retirement expectancies at age 50 by social class. We used the Lee-Carter method to complete mortality and information on previous cohorts to complete the labor force participation of partially observed cohorts. *Results:* Over the period 1989–2012 life expectancy and statutory retirement expectancy at age 50 increased with several years. Work expectancy declined in the early 1990s but has since been on an upward trajectory. The proportion of the total life expectancy at age 50 spent in work decreased from 33% to 31% for men and increased from 26% to 29% for women. These trends were similar across the social classes. However, there were large level differences as the upper classes had the highest life, work and statutory retirement expectancies. In contrast to the period results, for cohorts born in 1938–1953 the proportion of years spent working over age 50 increased among both men and women, from 23% to 26% and from 20% to 25%, respectively. Among men this increase was largest in lower social classes. *Conclusions:* Across successive cohorts an increasing share of remaining life at age 50 is spent working, despite steadily increasing life expectancy. However, the cohort analyses also reveal that the period perspective strongly overestimates the share of remaining life that is spent working, suggesting that assessments based on period approaches may be overly optimistic.