Abstract
AbstractIn this paper, we analyze gender and socioeconomic differences in the length of working lives and pension income in Finland. Based on internationally unique data covering 50 years of recorded information on individual employment histories and first-year old-age pension income of a cohort retiring in 2011, we trace life-time work histories and their relation to pension income with greater precision than previous studies. While gender and socioeconomic income differences in the lengths of working lives are modest, differences in pension income are more pronounced. The residence-based national pension targeted at those with no or only low earning-related pension accrual plays an important role in cushioning old-age income differences. The results suggest that unequal life-time earnings and occupational segregation remain main challenges for equalizing pension income in old age.
Highlights
The role of pensions in providing adequate means of living is gaining in importance in ageing societies
Empirical evidence on the relationship between individual lifetime work histories and level of income received in the old-age has been limited, though, making it difficult to quantify how, exactly, gender and socioeconomic differences in employment records contribute to the respective inequalities in pension income
8 Despite the relatively large number of cases (n = 9,354) in the ‘unknown’ social class, they were excluded due to the highly variable and distinct pattern in the length of working life and pension income, and the analysis focused on identifiable groups of social class
Summary
The role of pensions in providing adequate means of living is gaining in importance in ageing societies. Pension systems that combine accessible occupational pensions and offer earnings-related benefits to all economically active individuals in addition to basic pension seem to best protect against old-age poverty (Korpi and Palme, 1998) They seem to be best equipped to encounter the negative consequences of the de-standardization of employment histories (Möhring, 2015). Empirical evidence on the relationship between individual lifetime work histories and level of income received in the old-age has been limited, though, making it difficult to quantify how, exactly, gender and socioeconomic differences in employment records contribute to the respective inequalities in pension income. We utilize internationally unique register data covering 50 years of recorded and detailed information derived from the national and employee pension institutions in Finland on individual employment histories as well as pension income on the first full year on an old-age pension.
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