Skip to main content

Labor Market Effects of Increasing Statutory Retirement Age: The 2017 Pension Reform in Finland

This paper from the Finnish Centre for Pensions study the labor market effects of the 2017 pension reform in Finland.The statutory retirement age of the studied cohorts increased from 63 years for the 1954 cohort to 63 years and six months for the 1956 cohort. Using total register data recorded at a monthly level and a differences-in-differences approach, the authors estimate the effect of this reform on retirement, employment, unemployment, disability, sickness, and inactivity.

03. desember 2024

They find an increase in the employment rate of 19 percentage points between the old and the new retirement age, but also a notable increase in unemployment, inactivity, and disability. For the most part – but not entirely – this is explained by the persistence of the previous labor market state. There are no large gender differences, but the effects vary considerably by education and employment sector.