Life expectancy by labor force status and social class
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).