The role of unemployment as a reason for working years lost has increased, whereas the role of disability pension has decreased

In 2010–2016 following the financial crisis, the working life expectancy was extended for people aged 50 but not for people aged 30. An increasing number of working years are being lost due to unemployment, and unemployment has replaced disability pension as the number one reason behind lost working time. When inspected by industrial sector, the largest number of working years are being lost in the accommodation and food services, administrative and support services and arts and entertainment sectors, reveals a study by the Finnish Institute of Occupational Health.
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Press release 14.6.2022, LIFECON-project                                         

In 2016, the working life expectancy at age 30 was 24.3 years for men and 24.6 years for women. These figures were somewhat lower for both men and women than a few years earlier in 2013. In 2016, women’s working life expectancy was even shorter than in 2010 immediately following the financial crisis. In contrast, the working life expectancy at age 50 somewhat increased and in 2016 was for women over and for men under nine years.

The working life expectancy denotes the number of remaining work years at a given age. The calculations are carried out with the expectation that the work participation rates will remain as they were at the time of measurement.

The number of working years lost due to unemployment on the rise

In 2016, on average, people aged 30 were expected to have four remaining years spent unemployed and under two years on permanent full disability pension. In 2010, the corresponding figures were approximately three years unemployed and approximately 2.5 years on disability pension.

“The role of unemployment benefits as an alternative to work disability benefits typically increases in the economic downturn,” says Taina Leinonen, Senior Researcher at the Finnish Institute of Occupational Health.

“After the analysis period, long-term unemployment has after a temporary decrease returned to a high level, which is why it is expected that a large number of working years will be lost also in the near future,” says Leinonen.

Working years lost due to sickness allowance, temporary work disability, partial disability pension and old-age pension remained on a relatively similar level throughout the analysis period.

Expectancies by industrial sector were calculated for the first time – notable differences in working career outlooks

In addition to analyses concerning the general population, the study inspected the subject by industrial sector including people who were employed at the turn of the study year.

“While the immediate effects of the financial crisis of 2008–2009 are known to have shown especially prominently in the manufacturing and construction sectors, our study seems to indicate that the working career development in the years following the crisis has been the most negative in other sectors,” says Leinonen.

The largest number of working years were lost in the accommodation and food services, administrative and support services and arts and entertainment sectors, and the most significant reason was unemployment.

“The situation cannot be expected to have improved in recent years, as these are the same sectors on which the COVID-19 pandemic had an especially strong impact,” says Leinonen.

However, in other sectors, the development has been more positive. For instance, for men in the manufacturing as well as the water supply, sewerage and waste management sectors, also the working life expectancies at age 30 increased and the time spent unemployed decreased.

Why calculate working life expectancies?

  • Working life expectancies help us to assess, for example, the differences between different population groups, years or countries with regard to the cumulative length of working careers, without needing to follow up individuals throughout their working careers.
  • The calculated expectancies provide up-to-date information on the situation of working careers by anticipating the future.
  • The working life expectancy reflects the time that an individual of a certain age is expected to spend working, with the expectation that the work participation and mortality rates will remain at the same level as they were at the time of measurement.
  • Working years lost are the counterpart of working life expectancies, reflecting the expected time that an individual will at working ages spend in other activities apart from work.

How was the study conducted?

  • The study calculated the working life expectancies and working years lost among the general population in Finland and across different industrial sectors in 2010, 2013 and 2016.
  • The analyses used nationally representative register data and Sullivan’s method based on life tables. Participation in work and other activities was determined on the basis of earnings periods and social benefits periods.
  • The study was funded by the Strategic Research Council as part of the “Life course and economic implications of demographic change” LIFECON project (345170) and by the Nordic Council of Ministers (1023600).

Research article (in Finnish only)

Leinonen T., Viikari-Juntura E., Solovieva S. Työajanodotteet ja menetetyt työvuodet yleisessä väestössä ja eri toimialoilla vuosina 2010, 2013 ja 2016. Työpoliittinen aikakauskirja 2/2022.  

Further information

Taina Leinonen, Senior Researcher, Finnish Institute of Occupational Health, tel. +358 50 327 1723, taina.leinonen [at], @taina_leinonen

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